AUD/USD: 0.7085EUR/USD: 1.1200Global equity markets headed lower at the start of the week on the back of the persistent fears of a global economic slowdown, while oil prices fell after a meeting between Saudi Arabia and Venezuela failed to reassure investors of measures to bolster sagging prices. This all led to a rush into safe-haven assets, with the Yen and Gold being in particular demand. More of the same seems likely to lie ahead and the vagaries of risk sentiment seem likely to dictate trade today and in sessions to come. China is again closed so Asia should be quiet, but in terms of data, there is a bit to come from Germany (Industrial Production, Current Account, and Trade Balance) ahead of the US Wholesale Inventories. From Australia we get the NAB Business Conditions/Confidence and New Home Sales.
AUDUSD had a choppy session in trading either side of 0.7100 on Monday but has ended up pretty much unchanged from the opening levels, despite the selloff in risk assets seen elsewhere, with pressure to the session low of 0.7050 caused largely by the selling pressure in AudJpy.
While the avoidance of risk assets remains in focus, any positive progress for the Aud will remain tricky, and if the session low of 0.7050 gives way, look for a run towards the 2 Feb low at 0.7033 and on towards 0.7000. Under here would then open the way towards a deeper decline towards 0.6985 (61.8% of 0.6826/0.7240), to 0.6925 (76.4%) and then to 0.6900 and lower, towards the trend low at 0.6826.
A rally will see sellers once more at 0.7100 and then at the session high of 0.7128. Above here seems unlikely today although if wrong look for a run towards 0.7150 and potentially back to 0.7200.
In terms of data, the New Home Sales and the NAB Business Conditions/Confidence are due for release today, although with Asia out of the Lunar NY, liquidity and interest will remain diminished.
Economic data highlights will include:
China NY Holiday, New Home Sales, NAB Business Conditions/Confidence.
Jim LanglandsFX Charts
