AUD/USD: 0.9245EUR/USD: 1.3790Mixed EU manufacturing PMI data had little lasting effect , although the weaker US ISM has sent stocks higher, WTI lower and kept the pressure on the Dollar. Yen weakness was the main theme and this looks as though it could continue as the BOJ eyes further BOJ easing. The EU GDP and the ADP Jobs data will be the main event today as the market looks forward to tomorrows ECB meeting and Friday's NFP. Australia will get Building Permits.
While the official Chinese Mfg PMI came in as expected, the HSBC figure was a little weaker but had little lasting impact on the Aud yesterday as the market awaited the RBA. When it came to its turn, the RBA said very little in leaving rates unchanged, although the statement did manage to provoke a quick blip to 0.9303, since when the Aud has seen a steady slide to slightly lower levels but currently holding on above 0.9230 support.
If 0.9230 gives way, then I suspect we could be in for a deeper decline towards 0.9200 and possibly to the major support at 0.9150. Given the lack of data today, and the market's focus on Thursdays ECB decision and then on Fridays NFP roll out, I am not sure that today is going to do too much. Below 0.9200 would see interim support at 0.9185 (38.2% of 0.8660/0.9303/200 HMA) and I would be surprised to see this give way today.
A return to the topside, which looks a bit less likely while the intraday indicators point lower, will see decent sellers in the 0.9265/75 area. I would be surprised to see it much above there today, but if wrong, 0.9300 would again come into view, above which the next port of call would be the Fibo levels at 0.9339 (61.8% of 0.9757/0.8660) and possibly to 0.9387 (38.2% of 1.0582/0.8660). Beyond this, there is not a lot ahead of 0.9450 (daily cloud base) and 0.9494 (76.4% of 0.9757/0.8660). At this stage these are a long way off and with the short term indicators looking to be pointing a bit lower, upside progress today may be a bit limited, but the dailies are positive and buying dips for an eventual run towards the SHS target at 0.9590 remains the strategy.
For the coming session, use 0.9200/75 as a guide.
Economic data highlights will include:
ANZ Building Permits
Jim LanglandsFX Charts www.fxcharts.com.au
