AUD/USD: 0.9050EUR/USD: 1.3745Risk assets generally rallied and the Euro headed a little higher as tensions appeared to have eased in the Ukraine after Putin pulled back Russian troops, but it is once again stuck in a relatively narrow range against the dollar with the market remaining nervous and wondering what happens next. While common sense takes control, focus will now turn towards the ECB meeting on Thursday, although another flare up will see the Euro again come under pressure.
There is little change from a technical point of view, and aside from watching what Mr Putin has to say, the global services PMI’s and the US ADP Jobs data will be in focus, ahead of Fridays NFP release.
Having rallied to 1.3781 on the news that said Mr Putin saw no need to use military force in Crimea, the Euro is now back at the lower end of the range and treading water, with the 4 hour charts looking as though they may want to test 1.3700 and possibly lower, although the dailies remain rather non committal so I don’t think we are going too far in either direction.
Below 1.3700 would potentially head back to minor rising trend support at 1.3680 and then to last week’s 1.3643 base, below which, 1.3610 (61.8% of 1.3475/1.3824) would be the target but probably not today.
On the topside, 1.3680/90 will again find decent sellers, ahead of 1.3800. Above here, there is strong resistance at 1.3825/30 (61.8% of 61.8% of 1.4939/1.2042) where the descending trend resistance, going back to 2008 lies and will not be easily overcome; probably not before Thursdays ECB meeting, or perhaps before Friday’s NFP. If we do get above 1.3830, the next target would be 1.3892 (27 Dec high) and then 1.3950 (50% of 1.6037/1.1876/ Monthly cloud top). Above 1.4000, then don’t sand in the way, as I do not see a lot to stop it heading to the Oct 2011 high of 1.4246, which is also 76.4% of 61.8% of 1.4939/1.2042.
Once again look for a session of rangebound trade, stuck mostly between 1.37/1.38, but with a mild bias to the downside, possibly towards 1.3680.
The DXY is slightly higher once again at 80.15 and stays above the strong support at 79.90/00. As long as that remains the case, then maybe the dollar can make further headway to the topside.
Economic data highlights will include:
EU Services PMI’s, GDP, US ADP Jobs Data, Markit Services PMI, ISM Non-Mfg PMI, Beige Book
Jim LanglandsFX Charts www.fxcharts.com.au
