AUD/USD: 0.9165EUR/USD: 1.2825Conflicting comments from ECB board members drove the Euro around today, with the US data being rather mixed and offering little hint as to the next move from the Fed. Stocks are higher after the improved US Consumer Confidence and the consequent lift in risk sentiment has enabled the Aud and Kiwi to make some positive ground. Today will look to German Consumer Confidence and the US Durable Goods for guidance, while the RBA Governor Stevens will be speaking, possibly attempting once again to keep a lid on the Aud.
The Euro had a choppy session, falling to a low of 1.3748 after the ECB’s Weidmann suggested that further monetary easing is not out of the question, before bouncing strongly to a high of 1.3748 following a speech from Mario Draghi in which he added nothing new, but indicated that the ECB is not ready to act yet on any potential easing and will wait for further evidence of deflation or disinflation.
Earlier in the day, the Euro had been under some pressure following the release of the German IFO business climate gauge, which dropped more than expected to 110.7 in March, below consensus of 110.9.
U.S. consumer confidence jumped to a six-year high in March while new home sales rose 0.5% mm in January less than the expected 0.7% mm. S&P case shiller house price rose 13.2% yy in January versus expectation of 13.3%.
The moves of the day have done little to clarify the next direction and technically little has changed. Despite briefly breaking the rising trend support, the Euro is now back within the middle of the range of the last couple of days and more 1.38/1.39 choppy trade looks likely in the coming session.
The short term resistance is now at 1.3855 (200 HMA/50% pivot of 1.3966/1.3747), although the short term indicators do suggest that this could come under some pressure at some stage soon and a break would see a move on towards yesterdays spike high to 1.3875. Beyond there would take a look at the minor trend resistance at 1.3900, above which would suggest a retest of 1.3966 and eventually 1.4000. If we ever get there, this area won’t be easy to overcome as there well be plenty of option related sellers protecting it, but if/when the Euro finds the legs to head above it, there is not a lot to stop it heading on to the next major Fibo resistance at 1.4240 (76.4% of 1.4940/1.2041) which was also the Oct 2011 high.
On the downside, back below 1.3800 would see a run back towards 1.3770 and possibly to the session low at 1.3745 where we now have a short term double bottom. Under there, support is found at 1.3720 (weekly tenkan /50% pivot of 1.3475/1.3966), ahead of 1.3700, below which, lies 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 US Durable Goods will be the highlight today and in the meantime, as with yesterday buying the Euro on dips at around 1.3800/1.3780 looks to be the way to go, with a SL place under 1.3770 or preferably under 1.3745.
Economic data highlights will include:
German Consumer Confidence, US Durable Goods, Services PMI, US Banks Stress Test Info.
Jim LanglandsFX Charts www.fxcharts.com.au
