AUD/USD: 0.7620EUR/USD: 1.1215Traders reacted to the bombing in Brussels with an immediate move to eliminate risk positions by selling off risk associated assets although this move has since largely been reversed and both currency and stock markets remain relatively unchanged at the end of the session. The exception has been Cable which has fallen heavily because of the perception that the terrorism seen in continental Europe will increase the risk of the Brexit vote being carried in June. With regards to Wednesday, it will be politics and terrorism concerns that will again largely dominate trade, as markets thin out ahead of Easter. The focus of the coming session will be on the US New Home Sales, and with little of interest to come from Asia or Europe, it may be a fairly rangebound session.
AudUsd fell sharply to a low of 0.7550 following the bomb attack in Brussels which caused a quick move to sell risk associated assets. It has since recovered well as risk sentiment remains resilient, and in line with firm US equity markets the Aud has traded up to a high of 0.7642 before settling at the end of the day at around 0.7620.
Further choppy trade appears to be the most likely outcome. The daily charts remain overbought, so any upside progress, if seen, may be slow. The weeklies look constructive though, so above the session high would target 0.7650 (minor) ahead of the 0.7680 trend high seen last Friday. Above this looks unlikely today, 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.
A failure here would see a return to the downside, and back below 0.7600(100 HMA) we could then head towards 0.7570 and back to the session low of 0.7550 (200 HMA) and the Fibo support at 0.7543 (23.6% of 0.6826/0.7680). Below there, unlikely at this stage, would see a move back towards 0.7500 and possibly lower, towards 0.7478 (23.6% of 0.6826/0.7680) and then to 0.7460 (38.2% of 0.7108/0.7680).
In the absence of any major data today, look for a choppy session, but possibly with a mildly bid tone.
Jim LanglandsFX Charts
