AUD/USD: 0.8920EUR/USD: 1.3620The dollar is generally a bit mixed today against the other major currencies but is currently pretty much unchanged against the Euro, having recovered from a session low after it earlier failed to break down through 1.3600, when the dollar made some headway after the release of the U.S. trade deficit, which shrank to the lowest level in four years in November to US$34.25 bio, against expectations of around $40 bio.
The Euro was supported in Europe by the German unemployment release, which dropped sharply by -15k in December, (exp -2k). The headline rate remained unchanged at 6.9%.
It has been a generally lacklustre session though ahead of the FOMC minutes, due to be released later in the coming session and then ahead of Fridays US jobs/NFP numbers, which some banks suggest will not reach the projected increase of 195K, due to the current cold weather system that is disrupting economic activity in the US. Ahead of the NFP, the private sector ADP employment data may provide us with some clue later on today.
Technically there is very little change for the Euro and it could be that the choppy conditions continue to hold within 1.36/1.37. The 4 hour charts still look positive, but once again the Euro has run out of steam above 1.3650 (high 1.3655) and it needs to make some progress reasonably quickly if we are to see it head above here towards 1.3670 and possibly towards 1.3700, (1.3692: 38.2% of 1.3892/1.3570, 200 HMA: 1.3698). Beyond there would see a more aggressive squeeze towards 1.3730 and possibly to 1.3770, although at this stage it looks a little unlikely.
The downside points to watch remain unchanged, and 1.3600 will again see the initial buying interest. Below that, yesterday’s session low at 1.3570 will also see bids ahead of strong support which will be found at 1.3560 (daily cloud top) and again in the 1.3545/35/25 area (Rising trend support, 100 DMA, 61.8% of 1.3294/1.3892,) ahead of 1.3500. Further out, 1.3455 (23.6% of 1.2042/1.3892 & 38.2% of 1.2755/1.3892) and 1.3435 (76.4% of 1.3294/1.3892) will provide further support.
All up it looks like another rather directionless session, at least until the US data/FOMC minutes and until then we should probably once again stick to 1.36/1.37. There is some EU data out, including Retail Sales and Unemployment, although the market will now be focusing more keenly on tomorrows ECB announcement and Mario Draghi’s press conference.
Economic data highlights will include:
German Current Acc, Factory Orders, EU Retail Sales, Unemployment, US ADP Employment, FOMC Minutes, Consumer Credit
