AUD/USD: 0.9160EUR/USD: 1.3515The news of an Iranian nuclear deal, which will ease global sanctions in return for Iran cutting out some of the more sensitive aspects of its nuclear programme, has eased political tension and boosted optimism on economic growth, helping to underpin the dollar today.
The Euro was not helped after comments from ECB board member Ardo Hansson said he saw more room for the Bank to cut interest rates, repeating previous board members views, and the market now has an eye firmly on the chances of negative deposit rates. Thursday sees the German inflation data and the market is already putting that into focus as a soft number will increase the chance of an ECB easing.
US data was once again soft and stopped the dollar from making further gains. US Pending home sales fell by a seasonally adjusted 0.6% in October, disappointing market expectations for a 1.3% gain, while the US November Dallas Fed manufacturing survey came in at only (1.9 v 5.0 exp).
Today sees a fair bit more on the housing front from the US, as well as the Consumer Confidence figure, in what will be a shortened week, ahead of Thanksgiving.
Technically, the daily Kijun and the weekly Tenkan which both lie at 1.3560 managed to rebuff the Euro today and it is has fallen back to the pivot level of recent weeks at just below 1.3500. The outlook remains for pretty choppy trade and I would not be getting too excited in either direction, with the 4 hour charts are pointing for a test of slightly lower levels, while the dailies currently remain supportive of buying dips.
Flexibility is the key, and the points to watch, on the downside, are at 1.3490 (session low), below which would head towards 1.3460(61.8% of 1.3398/1.3557) and then to the minor rising trend support at 1.3420. Under that bids would arrive at the 21 Nov low at 1.3396 and then there are a series of higher lows, starting at 1.3408 which previously supported the Euro in its recent trend higher. I don't think we are going down here yet and would be a bit surprised to see it much below 1.3420 today - if indeed we get that far.
On the topside, there is now descending trend resistance at 1.3540, ahead of the 1.3560 level. Beyond there, last week's high at 1.3578 will be a hurdle ahead of 1.3600 and 1.3627 (61.8% of 1.3832/1.3294).A break of that will see further progress towards 1.3710 (76.4%) but is well out of touch for now.
Use 1.3460/1.3540 as a guide today, and most likely it will be another choppy but rather directionless session.
Economic data highlights will include:
US Housing Starts, Building Permits, Case Schiller House Price Index, Consumer Confidence
