AUD/USD: 0.9615EUR/USD: 1.2855US Consumer Confidence. reaching a 5 year high today, has ignited the prospect of a winding back of the Feds current stimulus programme, pushing the US$ generally higher in the process.
Elsewhere today the S&P Case-Shiller house price index rose slightly more than expected by 10.9% yoy in March and did the dollar no harm.
So, having been under a bit of pressure earlier on, the dollar has turned itself around again and the DXY (Dollar Index) has had a good bounce, to trade back to 84.29, the session high, and looks as though it may want to take on last week's 84.49 high.
As for the Euro, having been up to 1.2949 earlier in the session, we are now back below 1.2900 and sitting at session lows of 1.2952.
Essentially nothing has really changed and for the time being the Euro seems happy to trade sideways, albeit in choppy fashion, using 1.2900 as a pivot. The major data today will come from Germany, which could push the Euro around if it is too far from the consensus, but otherwise I suspect that we may be in for another session of sitting around current levels and I would be a little surprised if the Euro works up the impetus to test the support too hard in the 1.2800/20 area, although it does look pretty heavy at the moment and could see a push to slightly lower levels.
The points to watch therefore remain unchanged from previous sessions.
On the downside, back below today's low at 1.2850 would see further choppy trade that could take us down to the rising trend support at 1.2820, a break of which would tend towards 1.2800 (17 May low@ 1.2796). Under here 1.2740/70 will continue to see plenty of buyers and, as with yesterday, I still don’t think we are quite ready for this yet, but, if wrong and we do head down here, I would be doubtful of going much lower at the first attempt and would therefore be looking to buy back some shorts before looking to re-sell into rallies. If/when we do get there, look for further bids at the 50% projection of the decline from 1.3710/1.2744 from 1.3242 at 1.2758 and then the 1.2744 4th April low. Below this there is not too much to hold it ahead of minor supports at 1.2685 and at 1.2660 and then the 61.8% projection at 1.2645.
On the topside, back above 1.2900, and more likely 1.2950 (both Friday/Tuesday high: 1.2949) would see a run towards minor 1.2970 resistance, before possibly making an attempt on the 1.2990/00 area that was tested a couple of times last week, where further sellers will line up at 1.3000/10 (200 DMA: 1.3007), and so should be strong, but won't be of concern today.
I think another day of trade, probably above 1.2820, lies in store and would therefore use 1.2820/1.2920 may cover it, but make some allowance to possibly head down to 1.2800.
Economic data highlights will include:
German Unemployment, CPI
