AUD/USD: 0.40EUR/USD: 1.3775 The dollar hung on to its gains after the FOMC and made further headway against the Euro today, which now looks under some pressure of its own following the recent look at a 2 1/2 year high at 1.3966. Further dollar strength looks possible in the days ahead as the DXY heads higher, reversing its recent weakness, although in the absence of any major data to drive markets today, it could be a quiet end to the week. Have a good weekend.
The dollar continued to gain against the Euro today after Fed Chair Janet Yelled said a bit too much in hinting at a timetable as to when rate hikes might take place, by suggesting a time frame of around six months after the monthly tapering finally ends, currently expected to be in Q3 2014. The Euro has been down to 1.3748, and with the dailies now pointing firmly lower it looks as though there could be more weakness to come in the days ahead.
Currently sitting at 1.3775, the immediate support will be seen right here, where the daily Kijun lies. Below the session low would most likely extend to 1.3720 (50% pivot of 1.3475/1.3966), ahead of 1.3700 and then possibly to the top of the daily cloud at 1.3680. The 61.8% Fibo support is at 1.3660, which in turn lies ahead of rising trend support at 1.3630.
The short term charts are now becoming oversold, and thus any move lower looks likely to slow somewhat from here while they unwind. The hourlies actually look as though they are attempting to turn a bit higher, so we could yet get a retest of 1.3800, which if seen would appear to be a sell opportunity. If we head back above 1.3800, we could be in for a bit more of a squeeze, perhaps towards 1.3830. If we get back above 1.3880, then I suspect the shorts are going to get badly burned, but at this stage it looks unlikely and I suspect 1.3800/10 maybe as good as it gets.
There is little data out to drive it today and it could well be a day of choppy consolidation between 1.3740/1.3810, allowing for the short term charts to continue to unwind, in preparation for another push to the downside next week.
March EU consumer confidence is due later today. A soft reading may nudge the Euro lower once again.
Have a good weekend.
Economic data highlights will include:
EU Consumer Confidence
Jim LanglandsFX Charts www.fxcharts.com.au
