AUD/USD: 0.7175EUR/USD: 1.0870With the exception of US$Jpy, which has seen a decent ally on Tuesday, the currency markets have been reasonably rangebound with most of the action having been seen in the stock markets. These have headed higher following some firm US construction/manufacturing data, reawakening thoughts of a potential rate hike from the Fed. Today is fairly light on data with the EU PPI and the US ADP Jobs data being the main focus. The EIA Crude Oil Stocks Weekly Change and the Beige Book are also due. Before then Australia gets the New Home Sales and, more importantly the Q4 GDP, which could provide some volatility. The UK gets the Construction PMI.
The Aud has had a choppy session but is a bit higher today, having squeezed back, towards 0.7200 after some choppy trade and remains firm despite a quick dip as the US$ recovered following the release of today’s US data and today could see some decent action again with the release of the Q4 GDP (exp +0.5%qq, 2.6% yy).
Technically not much has changed, although now back above the 100/200 HMAs (0.7170) AudUsd could yet see a test of 0.7200 although this will depend on today’s data. If that is the case, beyond 0.7200 would allow a run towards 0.7230 and potentially back to 0.7255/60. The 200 DMA is currently at 0.7260 and we have not been above there since 10 Sept 2014, so a break of this, if and when we see it, could spark quite a rally although it does not seem likely to be bothered early in the coming week, but worth watching.
On the other side of the coin, a weak GDP reading would see the Aud head lower, potentially for a retest of the day’s low and the minor double bottom at 0.7108, where the minor rising trend support also lies. Below 0.7100 would open the way to the 19 Feb low at 0.7068 and on towards 0.7040 (50% pivot of 0.6826/0.7258) and then to 0.7000 (0.6992: 61.8% of 0.6826/0.7258).
Further out, below 0.7000 would then open the way towards a deeper decline towards 0.6930(76.4% of 0.6826/0.7240), to 0.6918 (26 Jan low) and then to 0.6900 and lower, towards the trend low at 0.6826.
Overall, expect it to be choppy but without too much direction while waiting for Fridays US Jobs data.
Economic data highlights will include:
Q4 GDP.
Jim LanglandsFX Charts
