AUD/USD: 0.9265EUR/USD: 1.3740The dollar was mixed, but made mild gains against the Euro, Chf and Jpy today, while Cable headed north after more strong UK data. The Kiwi lead the charge though, reaching a 2 1/2 year high, taking the Aud along for the ride. Plenty of data due today could make it an interesting session, with the highlights being, the German Inflation number, which comes ahead of the ECB April 3 meeting, followed by a mix of data from the US. Before then, there is plenty of data to be released from Tokyo today, which comes ahead of the end of Japanese FY, on Monday.
The Aud continues to make positive progress and currently sits at 0.9260, just below the day’s high of 0.9270. The 4 hour charts are in danger of becoming overbought and I suspect that progress could be slow for a session or two, but if it can continue higher, it will run into minor sellers at 0.9285 and then again at 0.9300.
As we said before, the neckline of the Head/Shoulder formation is now well and truly broken and the way now appears open for further strength in the days/weeks ahead, possibly towards the measured objective which is at around 0.9590. There is plenty of wood to chop before then, and if/when we can get above 0.9300, then we can expect a run towards the Fibo levels of the fall from 0.9757/0.8660 which are at 0.9339 (61.8%) and 0.9494 (76.4%). At this stage these are a long way off and with the short term indicators looking stretched, further upside progress today may be a bit limited.
On the downside, 0.9240 and 0.9220 will see minor bids ahead of 0.9200, below which would head to the rising trend support at 0.9175 and then possibly a return to the neckline/200 DMA at 0.9150. If we trade back below here, be very careful of being long of Aud as the correction could be quite severe.
Buying dips remains the name of the game with a stop loss left tight below 0.9150.
Jim LanglandsFX Charts www.fxcharts.com.au
