AUD/USD: 0.8960EUR/USD: 1.3685News that the Russian President, Putin, had put troops on alert due to the ongoing issues in the Ukraine sent the market into safe haven mode today, causing a quick move back into the US$. Better US home sales data also helped which arrived in time for Janet Yellen's testimony to the US Senate later today. Most of the focus will be on Yellen, but in Asia we get, Australian Capex data which will push the Aud around, and then from Europe, German Unemployment, CPI.
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Having ignored a positive German consumer sentiment report that showed a 7 year high, the Euro headed sharply lower on the news that Russian President Putin had put Russian troops on alert in case the Ukraine situation escalates. The dollar was also assisted by data that showed that U.S. home sales surged by 9.6% in January, despite the cold winter, and which arrived just in time for Janet Yellen’s testimony later today. Most of the questions that she will be asked will be to elicit her views on the strength of the U.S. economic recovery, the reasons for sluggish job creation and how the Fed's tapering program will affect the American and global economies.
Once again, unable to overcome the resistance at 1.3760/70, the Euro eventually rolled over and as come to rest above the session low of 1.3661 (38.2% of 1.3476/1.3772), which in turn, lies ahead of the top of the daily cloud and weekly tenkan at 1.3650. A break of this, which the indicators are hinting is increasingly possible, would head to 1.3625 (daily Kijun/50% of 1.3476/ 1.3773/base of the daily cloud) and if that breaks then we can expect a run back towards 1.3590 (61.8% of 1.3476/ 1.3773) and possibly to 1.3545 (76.4%).
If Yellen hints ata winding back of the tapering programme because of the recent soft data, then we can expect a selloff of the dollar to take the Euro back above 1.3700 to the recent 1.3740 pivot and then to 1.3770 which has acted as a cap. Above that, we would head to 1.3800 and then to the important trend resistance at 1.3830 (and 61.8% of 1.4939/1.2042) although th
Yellen aside, there is some important data out of the EU and the US today including German inflation and jobs numbers and later the US durable goods, so hopefully it could be a busy day. Also, keep an eye on what is happening in Russia/Ukraine
Economic data highlights will include:
German Unemployment, CPI, EU Consumer Confidence, US Durable Goods Orders, Jobless Claims, Kansas Fed Mfg Index, Janet Yellen Fed testimony to US Senate.
Jim LanglandsFX Charts www.fxcharts.com.au
