AUD/USD: 0.7295EUR/USD: 1.0870Markets have been mixed and rather choppy today although generally improved data has underpinned risk sentiment ahead of tomorrow’s important US Jobs data. US stocks are currently pretty much unchanged on the day while the US$ is mixed. Today sees the global Services and Composite PMIs, the EU Retail Sales and the US Factory Orders. Ahead of that Australia will have the January Trade Balance to contend with, although it maybe the Caixin China Services PMI that causes the greater volatility if too far from expectations (52.6).
The improved Q4 GDP (+0.6% q/q, v exp +0.4%) saw the Aud make a quick spike higher to reach 0.7235 yesterday, from where it has since made further gains in European/US trade, taking out the important 200 DMA at 0.7265 in the process, triggering stops and propelling the Aud on to a high of 0.7297.
The focus today will be on the AIG Performance of Services Index, the Trade Balance (exp -3.1bio) and the Caixin China Services PMI (prior 52.4)
AudUsd is back above the 200 DMA for the first time since Sept 2014, and as long as we hold on above here, further gains could see a larger recovery, beyond 0.7300, which could carry AudUsd on to the Dec 31 high of 0.7327 and then towards the descending trend resistance seen at around 0.7345. If we do get above here, look for further gains towards the 4 Dec high at 0.7385 and then to 0.7400,.
A failure here would retest the support that will be seen at the 200 DMA pivot, at 0.7265, below which could then head back to 0.7230 and to 0.7200 although this does not really look on the cards today unless the data turns out to be particularly weak. If so, the 100/55 DMAs lie at 0.7150/0.7108 but these look unlikely to be seen in the near term.
Economic data highlights will include:
AIG Performance of Services Index, Trade Balance, Caixin China Services PMI.
UK Services PMI.
Jim LanglandsFX Charts
