AUD/USD: 0.7150EUR/USD: 1.1130Friday ended up being a generally choppy session without any real directional action, although Sterling headed to the topside late in the day on after some positive comments coming from the discussions to keep the UK in the EU Union. The successful outcome was then announced by UK PM David Cameron just after the close and will ensure that Sterling will be in focus on Monday. The week ahead begins with the flash PMIs, but it will be mostly secondary data that the market will have to feed off until the EU CPI and the US Durable Goods Orders, both due on Thursday, and then the Provisional US GDP on Friday. RBA Governor Debelle will be speaking this morning and may use the opportunity to talk the Aud lower.
AUDUSD headed swiftly lower on Friday when RBA board member Edwards suggested that he would like to see the Aud trade lower at 0.6500. This saw a dash for the exit and a quick move to 0.7100 where it chopped around before falling again in US trade, to the session low of 0.7068, reversing back to the topside amidst general US$ weakness, to finish the week at 0.7140.
This week will be relatively data free as far as the Aud is concerned and so any movement will generally be dictated by offshore flows although there are a couple of RBA speakers early in the week who may add further weight to the Aud.
The charts suggest the choppy conditions look set to continue, with the ever-changing winds of risk sentiment looking likely to drive the direction.
If we head higher, resistance will be seen Friday’s high at 0.7168 and then again at 0.7186 (17 Feb high), above which could then see a run back to 0.7200. Above here would allow a move towards 0.7218 (minor) 0.7241 (4 Feb high), and then towards 0.7280 and 0.7300.
A failure would head to support at 0.7115 (200 HMA), ahead of a potential return to 0.7100. Below 0.7100 would then allow a return to Friday’s low of 0.7068 below which this would head towards 0.7040 and 0.7000, ahead of the 11 Feb low at 0.6983 and the 9 Feb low at 0.6972.
Economic data highlights will include:
M: RBA Governor Debelle Speech
T: RBA Governor Edey Speech
W: Wage Price Index, Construction Work Done
T:
F: China House Price Index
Jim LanglandsFX Charts
