AUD/USD: 0.7170EUR/USD: 1.1100New York Fed President William Dudley put the dollar under pressure on Wednesday with some dovish comments that suggested that the Fed are going find it difficult to hike rates again in the foreseeable future, causing the dollar head sharply lower today against all the major counterparts. A positive flow-on effect in risk assets, with sentiment looking more positive on the basis of continued low interest rates, has allowed stocks to sharply reverse earlier losses and to end the day higher, with commodities also making good gains. It looks like being a nervous session ahead, although in the absence of any major data it may prove to be one of waiting for tomorrows US Jobs data before the real action begins.
Buying into weakness turned out to be the correct plan yesterday, and after drifting off to a session low the Aud joined in the strong currency rally against the US$ and currently trades just below the session highs of 0.7188.
The NAB Business Conditions/Confidence are due later in the coming session and may provide some waves in what could be a rather nervous session given the moves seen in the US; otherwise it will be a day of China watching, while waiting for tomorrow’s domestic Retail Sales and then later on, the US Jobs data.
AUDUSD seems to be heading towards 0.7200 and then close-by, to 0.7208; 76.4% of 0.7327/0.6826). Above here, minor resistance lies at 0.7230 and 0.7245, but a break of which would possibly see it back at 0.7300 and the 31 Dec high at 0.7327.
If the Aud ends up failing here we could see a return to 0.7140, which is both the 55 and 100 DMAs, previously resistance and now support. Under there could see a run back to 0.7100 (23.6% of 0.6826/0.7188), although this seems unlikely today, but below which would head towards the 100 HMA at 0.7075, the 200 HMA at 0.7045 and minor rising trend support at 0.7020.
Economic data highlights will include:
NAB Business Conditions/Confidence
Jim LanglandsFX Charts
