AUD/USD: 0.8750EUR/USD: 1.3670The Euro received an early boost in Europe when the German IFO business climate data for January came in better than expected at 110.6, as against the expected 110.0, for the strongest reading in almost 3 years and sent the Euro immediately up through 1.3700 to a session high of 1.3716 .
That was as good as it got for the Euro though and it is now back to where it closed the weekend, with most players watching the stock market moves, which in turn remain nervous, but have closed about flat in the US, having earlier fallen sharply as the fallout from the EM continues.
Expectations that the Fed may further reduce its stimulus this week has halted the decline in the dollar, although it remains under pressure and was not particularly helped today by weather-affected soft housing sales which came in at 414K, missing expectations of 475K.
Technically, the Euro is in a messy phase, well below today’s and Friday’s highs at 1.3716 high and 1.3739 respectively, and will probably remain so ahead of this week’s FOMC meeting, although we do get the US Durable Goods orders today and if soft, could again have the dollar under pressure. The 4 hour charts, having risen steeply following last week’s firm EU manufacturing data now appear to be unwinding and turning a little lower, although the dailies remain positive. All up a rather confused outlook.
On the downside, below today’s session low of 1.3652, which should be reasonably strong support (1.3660: daily cloud top, 1.3650: 38.2% of 1.3507/1.3739), although SL are building below here, would take us back into the cloud, where the daily Tenkan at 1.3635 will provide further support. Under there would head back towards 1.3600 and the 100 DMA which is rising fast, currently at 1.3588. I don’t think we are going close to this today, but if wrong, in the more medium term 1.3525 is 61.8% of 1.3294/1.3892 and then below 1.3500 would head down towards 1.3455 (23.6% of 1.2042/1.3892 & 38.2% of 1.2755/1.3892) beyond which, 1.3435 (76.4% of 1.3294/1.3892) will attract.
On the topside in the medium term, there will be sellers near the recent highs within the 1.3720/40 area, Above that would head on to the base of the monthly cloud, descending quickly but currently at 1.3765, which should be strong, but a break of which would take us back to 1.3800 and above towards the 27 Dec, 1.3892 high.
For now expect some choppy trade within a 1.3630/1.3730 as we wait for the FOMC meeting, while keeping an eye out for the US data due later today.
Economic data highlights will include:
US Durable Goods, Case Schiller Home Price Index, Consumer Confidence, Richmond Fed Mfg Index
AUD/USD: 0.8750EUR/USD: 1.3670The Euro received an early boost in Europe when the German IFO business climate data for January came in better than expected at 110.6, as against the expected 110.0, for the strongest reading in almost 3 years and sent the Euro immediately up through 1.3700 to a session high of 1.3716 .
That was as good as it got for the Euro though and it is now back to where it closed the weekend, with most players watching the stock market moves, which in turn remain nervous, but have closed about flat in the US, having earlier fallen sharply as the fallout from the EM continues.
Expectations that the Fed may further reduce its stimulus this week has halted the decline in the dollar, although it remains under pressure and was not particularly helped today by weather-affected soft housing sales which came in at 414K, missing expectations of 475K.
Technically, the Euro is in a messy phase, well below today’s and Friday’s highs at 1.3716 high and 1.3739 respectively, and will probably remain so ahead of this week’s FOMC meeting, although we do get the US Durable Goods orders today and if soft, could again have the dollar under pressure. The 4 hour charts, having risen steeply following last week’s firm EU manufacturing data now appear to be unwinding and turning a little lower, although the dailies remain positive. All up a rather confused outlook.
On the downside, below today’s session low of 1.3652, which should be reasonably strong support (1.3660: daily cloud top, 1.3650: 38.2% of 1.3507/1.3739), although SL are building below here, would take us back into the cloud, where the daily Tenkan at 1.3635 will provide further support. Under there would head back towards 1.3600 and the 100 DMA which is rising fast, currently at 1.3588. I don’t think we are going close to this today, but if wrong, in the more medium term 1.3525 is 61.8% of 1.3294/1.3892 and then below 1.3500 would head down towards 1.3455 (23.6% of 1.2042/1.3892 & 38.2% of 1.2755/1.3892) beyond which, 1.3435 (76.4% of 1.3294/1.3892) will attract.
On the topside in the medium term, there will be sellers near the recent highs within the 1.3720/40 area, Above that would head on to the base of the monthly cloud, descending quickly but currently at 1.3765, which should be strong, but a break of which would take us back to 1.3800 and above towards the 27 Dec, 1.3892 high.
For now expect some choppy trade within a 1.3630/1.3730 as we wait for the FOMC meeting, while keeping an eye out for the US data due later today.
Economic data highlights will include:
US Durable Goods, Case Schiller Home Price Index, Consumer Confidence, Richmond Fed Mfg Index
