AUD/USD: 0.9015EUR/USD: 1.3740The dollar is mixed against the majors today after yet more soft - weather affected - US data. In the absence of any major data today, it could be another rangebound session as the market looks towards Janet Yellen's US testimony, Thursday. The direction of the Chinese Yuan is keeping the market guessing and is seeing some safe haven demand for the Yen, while at the same time keeping the pressure on the Aud. Today, the UK GDP, German Consumer Confidence and US New Home Sales will provide direction. NZ Trade Balance, too.
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The Euro was once again quiet into early European trade moving up briefly to 1.3766 shortly after the German Q4 GDP release, that came in as expected, at +0.4% mm, but overall the interest and volatility was muted. That was as good as it got for the Euro though, in another tight, session contained within the 1.3715/66 range, despite the dollar being slightly weaker elsewhere after more soft US data, this time being the US Consumer Confidence, which came in below expectations. On a brighter note, the Case-Shiller house price index rose 13.4% in December from a year earlier, the best December reading in eight years and slightly ahead of forecasts for a 13.3% gain.
Elsewhere today the EU Commission revised up its 2014 growth forecast for the Eurozone to 1.2%on from 1.1% in November, but cut its inflation forecast to 1% from 1.5% and warned that debt levels in several EU countries will continue to climb.
Technically there is no real change, and with little data due today it may be another quiets session as the market waits for Janet Yellen’s US Senate testimony tomorrow.
Having once again held above 1.3700 (23.6% of 1.3476/1.3772) again today, the Euro sits above the strong support at Thursday’s low at 1.3685 (50% pivot of 1.3476/1.3772). If seen, this area would continue to attract decent buyers, which is backed up by support at 1.3670 (daily tenkan) and Fibo support at 1.3660 (38.2% of 1.3476/1.3772) and then thet op of the daily cloud, now at 1.3650. I don’t really see it below here in coming sessions - and for the time being the 200 HMA, now at 1.3720, is doing a good job of holding the Euro up ahead of 1.3700, - but if wrong, look for an acceleration towards the weekly tenkan at 1.3650 and then 1.3625 (daily Kijun/50% of 1.3476/ 1.3773).
On the topside, 1.3770 capped it once again today. Above there would head towards 1.3800 and then to the major descending trend resistance at 1.3830 (also 61.8% of 1.4939/1.2042). A break of this area would be fairly pivotal for the Euro, as I suspect we would then be headed towards 1.3892, (Dec high) and then possibly on to 1.4000 although this is still some way off and I would not expect it in the next few days.
Look for more choppy trade within 1.3700/1.3770, although a break of one side or the other is due, but for now remain neutral, with the German Consumer Confidence and US New home sales being the only data due out. The DXY is currently at 80.13, pretty much unchanged, but still holding the important support at around 79.95 (200 WMA and the multi-year rising trend support).
Economic data highlights will include:
German Consumer Confidence, US New Home sales
Jim LanglandsFX Charts www.fxcharts.com.au
