AUD/USD: 0.7100EUR/USD: 1.1140The US$ and stocks have had a solid session after the declaration of a deal between Russia and Saudi Arabia to restrict oil output levels to January, albeit with certain stipulations that could limit its effectiveness and which has caused the oil price to decline sharply. It has all been rather messy today, which could be a recurring theme in the sessions ahead, with risk sentiment likely to again be the driver. Today’s focus will be mostly on the US, from where a fair bit of data is due (Housing Starts, Building Permits, PPI, Capacity Utilisation, and Industrial Production), as well as the release of the FOMC Minutes although these are expected to contain few surprises, coming so soon after Janet Yellen’s testimony to Congress last week. Elsewhere, the UK Unemployment data is due, as is EU Trade Balance and Construction Orders.
AUDUSD is lower again today, back at 0.7100 after earlier reaching a high of 0.7180. The damage was done mostly by the fall in the oil price which has dragged the other commodities lower, taking the commodity bloc currencies with them.
Further choppy trade within the 0.7000/0.7200 range looks likely in the days ahead, dependent largely on risk sentiment as there is little economic data today to provide any direction. The momentum indicators look a little negative, which if correct, could head towards support at 0.7060/65 (minor) below which 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.
On the topside, resistance will be seen at 0.7110/15 (100/200 HMAs) and then at 0.7130 (minor) ahead of 0.7150 and the session high at 0.7180. This looks a step too far today but if wrong look for a run back to 0.7200, beyond would allow a run towards 0.7218 (minor,) 0.7241 (4 Feb high), and then towards 0.7280 and 0.7300.
Economic data highlights will include:
WBC Leading Economic Index, China CB Leading Economic Index
Jim LanglandsFX Charts
