AUD/USD: 0.8960EUR/USD: 1.3678The Euro is slightly firmer against the US$ today, after the solid US retail sales data (+0.2%, exp 0.1%, although November was revised downwards), which assisted the dollar against the other majors, (particularly against the Yen, Aud), was more or less offset by some relatively hawkish comments from ECB governing council member Nowotny, who said that there is ‘potential on the upside’ to ECB's growth forecast for 2014. This is currently projected at 1.1%.
In other data today, EU industrial production for Nov was +1.8% (exp +1.4%) and did the Euro no harm. There is little data of major importance out in the coming session and thus I suspect we should expect another largely rangebound day, although the bias in the 4 hour charts does appear to be marginally to the topside. I think we need to overcome 1.3700/20 area fairly soon or we are in for a potential relapse towards the 1.3550 area.
The points to watch are pretty much unchanged. The session high of 1.3698 means that the sell orders at 1.3700 remain in place and if they can be overcome, then we should head towards 1.3720 (50% pivot of 1.3892/1.3548). Above this, the next port of call would be 1.3760 (61.8%) and then 1.3810 (76.4%) the latter of which I suspect will be a stretch too far today. I think that if we are to head higher, we need to overcome 1.3700/20 area fairly soon or we are in for a potential relapse towards the 1.3550/70 area
A return to the downside would see some support at 1.3648/ 1.3638 – the lows of the last two sessions - , a break of which would head back towards 1.3600 (weekly Tenkan/pivot) and possibly to 1.3575, where the medium term rising trend support now lies. Below this would head back towards further decent support at 1.3560 (daily cloud), 1.3545/25 area (100 DMA, 61.8% of 1.3294/1.3892,) and then to 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 attract.
In the absence of any major market movers, use 1.3650/1.3720 as a guide today, without looking for too much in either direction
Economic data highlights will include:
EU Trade Balance, US Mortgage Applications, PPI, Beige Book
