AUD/USD: 0.395EUR/USD: 1.3620The Euro continued to a new 8 month high today, assisted by the ongoing inability of Congress to agree a budget package that would unlock the current standoff, with the dollar being further depressed by the worse than expected non-mfg ISM, which fell to a three-month low of 54.4 in September (exp 57.4) from 58.6 in August.
US Initial jobless claims came in at 308k, pretty much unchanged from the prior week's 307k, but below expectation 315k.
Earlier in the day, EU retail sales rose 0.7% in August (exp 0.2%) after an upwardly revised 0.5% increase for July. Positive secondary data out of Germany, Italy and France did nothing to hurt the Euro to reach its its 1.3645 high.
Today we are supposed to get the main event of the week, the US jobs data/NFP, although it has been postponed due to the government lock down and could therefore be a fairly quiet end to the week, with the dollar likely to remain under pressure as the blame game continues in Washington.
Technically, the Euro is grinding its way towards the 1.3710 target (1 Feb. high) although the short term indicators suggest that it is going to be a bit of a push to get there today. Resistance at 1.3660 remains intact (4 Feb high) and 1.3700/10 could be difficult to attain. If wrong, beyond would see further sellers at 1.3760, after which we should look for a run towards 1.3810 (61.8% of 1.4939/1.2041). The dailies do still point higher and so this should not be ruled out, but I suspect that a bit of a correction to the current uptrend is not too far away. Cable appears to be leading the way, having apparently topped out already, and if Usd/Chf can break above 0.9030, the Euro could come under some pressure.
On the downside, 1.3550 is now rising trend support, below which 1.3500/20 will again be solid, with the first Fibo support, now at 1.3515 (23.6% of 1.3104/1.3645). Below this would head towards minor support at 1.3490 and then towards 1.3440(38.2%).
Today, look for a 1.3580/1.3680 range, with the highlight looking likely to be the EU PPI. I prefer trading form the short side, but would be square ahead of the w/e close.
Economic data highlights will include:
EU PPI, US Unemployment/NFP.
