AUD$ firm in line with higher stock markets, oil.

AUD/USD:  0.7140
EUR/USD:  1.1150

Although Monday has been a holiday in the US it turned out to be a busy session, largely dictated by a recovery in risk assets, with a solid session seen in European and Japanese (+7%) stock markets. Oil consolidated Friday’s gains, which has allowed a recovery in the US$ against the majors, and also in the commodity bloc currencies. Mario Draghi placed the Euro under pressure by reiterating that the ECB will act to ease policy if necessary. NORAM markets are back today although there is not too much date to drive the direction. The focus is going to be on the German/EU ZEW Economic Sentiment Survey and then later on, from the US, we get the New York State Empire Mfg Index and the NAHB Housing Market Index. Before then, the NZ Retail Sales are due shortly, to be followed by the RBA Minutes. From the UK comes the CPI, RPI and the PPI.

AudUsd ignored the soft China Trade Balance and the weak Chinese stock market on Monday, and squeezed steadily higher, to peak at 0.7171 before giving up some of those gains to finish the session at 0.7145.
                      
The RBA Minutes will be closely scrutinised today, with traders searching for hints on whether the easing bias will translate into a rate cut soon, although the RBA are unlikely to surprise the markets given that its SOMP was released a week ago. The China Foreign Direct Investment is also due for release today.
 
It would seem that more choppy trade could lie ahead, although as we said before, the daily/weekly momentum indicators are mildly constructive, so a move towards 0.7200 would not surprise. Ahead of that, the session high (0.7171) and the Fibo resistance 0.7177 (76.4% of 0.7241/0.6972) will see good sellers. A break of 0.7200 would allow a run towards 0.7218 (minor,) 0.7241 (4 Feb high), and then towards 0.7280 and 0.7300.
 
If we fail at these levels, the Aud would find support at 0.7100, below which would see support at 0.7060/65 (minor). Under here would head towards 0.7040 and 0.7000, ahead of the Thursday low at 0.6983 and the Wednesday low at 0.6972 although this seems unlikely to be seen today.
 
Economic data highlights will include:
 
RBA Minutes, China Foreign Direct Investment.
 
Jim Langlands
FX Charts