AUD/USD: 0.9630EUR/USD: 1.2940 Pimco's statement yesterday put the skids under the Aud, helping to send it to a low of 0.9527, allowing the market to add to their shorts near the base, since when, we have seen a decent bounce that could yet have legs to further squeeze out the late comers, as the US$ remains under a bit of short term pressure.
Although the medium term direction remains to the downside for the Aud, I do not think we are going to see the session lows again today and the 4 hour charts continue to show some bullish divergence, so a squeeze towards 0.9700 and possibly to minor Fibo resistance at 0.9770 would not surprise. That may be a stretch too far today and we may be in for another session of sitting around above 0.9600. If that is the case, any further upside potential would seriously diminish and would see the weakness resume for another test of 0.9580 and lower.
If we do turn lower, back below 0.9580 and more likely 0.9527, which I don't expect today, we would then see a run below 0.9500 towards 0.9450 (minor) and then to 0.9390 (2011 low). The longer term target of 0.8900 remains in play.
Today, look for 0.9580/0.9670 to cover it with a mild bias to head a bit higher. Some minor data may help it on its way.
Economic data highlights will include:
Building Permits, Private Capex
