AUD/USD: 0.8990EUR/USD: 1.3905It has been a choppy day, driven by varying concerns over China/Crimea. The Yen remains in demand as a safe haven and the US$ is also under some downside pressure against the Euro and the Chf. Elsewhere, the RBNZ just raised rates, sending the Kiwi higher, while the Aud waits on today's domestic jobs data and Chinese Retail Sales/Industrial Production . Another session of watching the news reels looks likely, with safe haven trades still in demand.
The Aud spiked down to support at 0.8924 (daily cloud top/kijun) on the break of support at 0.8950 (0.8953; 38.2% of 0.8659/0.9133) but has since bounced strongly to sit just below the 200 HMA at 0.8993, ahead of today’s upcoming Australian Jobs data. Higher Copper/Iron Ore Prices did the Aud no harm today.
While the headline unemployment number is expected to remain unchanged at 6%, the number of jobs created is an expected to show an increase of 18K as economists feel that the employment market is improving. They must speak to very different people to me, none of whom are at all positive about the jobs outlook. We shall have to wait and see, but a poor reading would once again raise the prospect of the need for another rate cut from the RBA, which would send the Aud lower.
Aside from the Jobs data, we have some important Chinese numbers coming up, headed by the Retail Sales/Industrial Production, and if the overall outlook remains soft, then the upside for the Aud is going to remain limited.
The points to watch, on the downside, are at the 0.8925 session low, beyond which would look at 0.8895 (50% of 0.8659/0.9133/rising trend support). Under there would accelerate towards 0.8840(76.4%), but at this stage I think it is too early to think of this.
If the economists are right and the jobs number improves, then we may see another run back to 0.9000 and above, where sellers would line up at minor resistance at 0.9020 ahead of stronger interest at 0.9040/50. I don’t think we are heading above here today, but if wrong, above 0.9040 would potentially see a squeeze towards the 100 DMA at 0.9075.
Further out, beyond 0.9075, then we might expect a run up towards 0.9100 and possibly to Friday’s top at 0.9133. Above this looks a little unlikely in the near term but the eventual target would be the 200 DMA at 0.9170, which in turn lies ahead of the 12 month descending trend resistance currently at 0.9195.
The short term indicators suggest that 0.8925 may be a short term base and thus for today I would look for 0.8950/0.9040 to cover it, but all will depend on the data.
Economic data highlights will include:
Consumer Inflation Expectation, Unemployment, China Retail Sales, Industrial Production, Urban Investment:
Jim LanglandsFX Charts www.fxcharts.com.au
