AUD/USD: 0.7580EUR/USD: 1.1240Monday has been a choppy, mostly range-bound session, with the currency markets seemingly heading into holiday mode, although some dovish Fed comments kept the US$ underpinned. Equities made new trend highs but are closing near their weekend levels. It could be busier today, beginning with speeches from the RBA’s Stevens/Edey. Europe will then be active, with the release of the German IFO and ZEW figures, as well as the flash Mfg/Services/Composite PMIs, and then later from the US we get the flash Markit Mfg PMI, the House Price Index (Jan) and the Richmond Fed Mfg Index (Mar).
AudUsd had a choppy session and traded heavily in Asia yesterday, heading down to 0.7568 before a sharp European rally that took it up to 0.7626, where it ran out of steam and has since traded close to 0.7600, leaving the outlook pretty much unchanged.
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Speeches from the RBA Governors, Stevens and Edey are coming up shortly, so we may see another attempt to talk the Aud$ lower, although the effectiveness of doing that is waning. Other than that, the House Price Index is the only item on the calendar.
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The daily charts remain constructive, but are sending out warning signals as they become increasingly overstretched, and with the 4 hour charts still pointing lower we could be in for a move back towards the 0.7568 session low (100 HMA), below which would head towards 0.7543 (23.6% of 0.6826/0.7680) and then to the 200 HMA at 0.7535. Below there, unlikely at this stage, would see a move back below 0.7500 towards 0.7478 (23.6% of 0.6826/0.7680) and then to 0.7460 (38.2% of 0.7108/0.7680).
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If the Aud can make further headway, then above 0.7600 and the 0.7626 session high would target 0.7650 (minor) ahead of the 0.7680 trend high seen last Friday. Above this looks unlikely, but further gains would head towards 0.7700 and then to 0.7738 (1 July 2015 high). Beyond there would head towards 0.7800, with the next Fibo levels not seen until 0.7845 (38.2% of 0.9504/0.6826 and also 76.4% of 0.8162/0.6826), but which should be very strong, if/when seen.
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Economic data highlights will include:
House Price Index, RBA Speeches: Edey, Stevens
Jim LanglandsFX Charts
