AUD/USD: 0.9505EUR/USD: 1.3515The better than expected weekend China Services data, followed up by the improved Australian Retail Sales yesterday has given the Aud a boost, having now cracked 0.9500 (high 0.9514) ahead of today's RBA Meeting. No one expects the RBA to cut, allowing the financial markets army to concentrate the Melbourne Cup without interference! As talk gathers speed about the chances (or not) of an end to the easing cycle, we might see a bit of an improvement in the fortunes of the Aud (particularly against the Euro if the RBA sit on their hands and the ECB eases on Thursday - worth watching) and we could yet see it squeeze a bit higher.
The 4 hour charts are positive and if the session high can be overcome, I think we could be in for a bit of a run towards 0.9550 Fibo resistance (0.382 of 0.9757/0.9421). Beyond there may prove a bit tricky but the points to watch today would be at 0.9587 (50% pivot), 0.9600 and 0.9627 (61.8%).
On the downside, 0.9475 will be minor support ahead of 0.9440 and 0.9420. I don't see it down here today (0.9428: 38.2% of 0.8891/0.9757 and then 0.9410 :38.2% of 0.8848/0.9757 both provide support) but the dailies remain negative and near term rallies may present sell opportunities for an eventual run towards 0.9400 and 0.9380. Below this would see a deeper decline toward 0.9330 and eventually to 0.9250. Don't get too excited about this yet and for today use 0.9475/0.9550 as a guide, which should hold unless the RBA spring a surprise.
Economic data highlights will include:
China Services PMI, RBA IR Decision, Melbourne Cup (Melbourne Holiday)
