AUD/USD: 0.7025EUR/USD: 1.0895The Fed and the RBNZ both left interest rates on hold although each had a dovish tone and noted the downside risks which consequently saw both the US$ and the New Zealand Dollar come under some selling pressure, as did the US stock markets going into the end of the session. Further choppy conditions look to be in store and the market will now look to China’s reaction to the Fed’s decision. Elsewhere today there will be various pieces of data from the EU (Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate) and from Germany ( Provisional CPI) but the focus is going to once again be on the US, from where we get the December Durable Goods Orders, Pending Home Sales, Jobless Claims and Kansas Fed Mfg Activity. Ahead of that, the main events will be the Chinese Leading Economic Index and from the UK, the Q4 GDP.
AudUsd retained a firmer tone following yesterday’s slightly improved CPI reading, eventually taking out the resistance at 0.7050 in heading up to 0.7080 before reversing after the Fed statement, to trade down to 0.7045. An hour later, the RBNZ also left rates on hold but indicated that further cuts may be needed, dragging the Kiwi lower, taking the Aud with it, which currently sits at 0.7020.
Today could be a quieter one for the Aud with little major data due, meaning that any flows will come from the flows seen in the wake of the Interest Rate Decisions from the Fed and the RBNZ, with one eye, as usual, on China.
To the topside, resistance will be seen in the 0.7075/80 area (0.7075: 50% of 0.7327/0.6826), beyond which could head on to 0.7100 and then 0.7135 (61.8%) and 0.7208 (76.4%).
A return to the downside will find bids at 0.7000 (100 HMA) and then to rising trend support at 0.6950 although this looks unlikely today.
Economic data highlights will include:
CB Leading Indicator.
Jim LanglandsFX Charts
