AUD/USD: 0.7535EUR/USD: 1.1185 The US$ has finished on a firm note today as talk of a US rate hike is once more back in focus, as alluded to by various Fed board members. The strength of the dollar has seen risk assets all come under pressure. WTI and the metals are sharply lower, which in turn has placed the commodity currency bloc under pressure. Today will become increasingly thin as liquidity dries up although there is a fair bit of data due ahead of the holiday. The flash PMIs will lead things off in Europe, which will also see the LTRO figures. The US will then focus on the Durable Goods Orders and the Kansas Fed Mfg Activity. There will also be a speech by Fed board member, Bullard. Note that Good Friday, tomorrow, will see the Q4 US GDP figures in what will be a very thin market.
AudUsd has fallen heavily from the session’s 0.7648 highs and is down by around 1.5%, not helped today by the sell-off in oil, gold and stocks which was generally caused by the ongoing hawkish comments coming from various Fed board members. With no data due today it will be risk sentiment that again drives the direction.
The 4 hour indicators seem to point lower, and with the Aud currently sitting just above session lows of 0.7520, we could be in for further downside pressure towards 0.7500 and lower. If so, look for a run towards 0.7478 (23.6% of 0.6826/0.7680) and then to 0.7460 (38.2% of 0.7108/0.7680). A break of this would then open the way to 0.7414 (16 Mar low) and to 0.7392 (50%).
If we see a squeeze higher, sellers will be seen at 0.7560 (200 HMA) and then at 0.7580 (minor) and at 0.7600 (100 HMA). Beyond this, which seems unlikely, could potentially see a return to the session high of 0.7648 although I don’t think we get close.
Further out, with the weekly charts remains upbeat, suggesting that we could eventually revisit the 0.7680 trend high seen last Friday. Above this looks unlikely for a while, if at all, 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.
Jim LanglandsFX Charts
