AUD/USD: 0.9640EUR/USD: 1.3365The Euro is back near the top of its 24 hour range after having earlier lost some ground against the dollar following the stronger than expected US retail sales (+0.6% v +0.4% exp). Ex-auto sales rose 0.3%, in line with consensus and Initial jobless claims improved to 334k (exp 345k). Overall though, sentiment towards the dollar currently remains fairly weak and at the end of the NY session we are actually not too far removed from where we started. A WSJ article by Jon Hilsenrath before the NY close, suggesting that the Fed is trying to disconnect the idea of tapering asset purchases to rate hikes did not help the dollar and underpinned the Euro.
Technically, having traded a 1.3278/1.3390 range today, the points to watch remain unchanged.
We again sit not too far removed from the Fibo level of 1.3338 (61.8% of 1.3710/1.2742) but have yet to reach 1.3400 and some more choppy trade near here looks probable. The 4 hour charts are trying to unwind and possibly head a bit lower, although if we can get above 1.3400 we may want to look at the strong resistance at 1.3445(major downtrend). I would be surprised to see this broken, but if wrong, look for 1.3480 (76.4% of 1.3710/1.2742) and eventually 1.3500. As with yesterday, the dailies still point higher, but the Euro needs to get a move on if it is to make any headway otherwise the dailies will start to become overbought and it will turn around and head back, to head back to the day's lows, and possibly to test trend support, now at 1.3250.(38.2% of 1.2796/ 1.3390).
For the time being, support below 1.3280 looks reasonably safe, but if wrong, a break would take us down to 1.3200 and then to 1.3165 (38.2% of 1.2796/ 1.3390).
It could get a little hectic later on as there is there is a fair bit of data out later on today but overall I am still looking to sell into strength above 1.34 with a SL somewhere above 1.3480
Economic data highlights will include:
EU CPI, Employment Change, US PPI, C/Account, Capacity Utilization, Industrial Production, Rts/Michigan Consumer Sentiment Index
