AUD/USD: 0.9320EUR/USD: 0.3710
Markets were generally pretty quiet and look to remain so again today in the absence of any major data, apart from the UK CPI to provide any volatility. The Aud looks heavy, ahead of today’s RBA Minutes, on the back of soft Iron Ore prices and could see a test of the downside.
The combination of lower iron ore prices and an AFR article stating that Standard and Poors see Australia’s AAA Credit Rating potentially coming under pressure unless substantial cuts are made to the budget deficit sent the Aud lower in NY and it is trading just above its 0.9321 lows in early Asian trade.
The RBA minutes are due later although no surprises are expected, but should the slide continue, stops below 0.9320 will get triggered potentially taking the Aud back below 0.9300.
The initial support comes at 0.9313 (daily Kijun), below which would see a decline towards the 50% pivot of 0.9201/0.9408 at 0.9305. Below the rising trend support at around 0.9296 would head towards 0.9280 (61.8% of 0.9201/0.9408) and then to the daily cloud top at 0.9260
With the daily and 4 hour chart looking negative, the upside potential today looks somewhat limited and offers are likely to be frond at 0.9360 (100/200 HMA), although I am not even sure that we see it up here, unless the RBA Minutes have a particularly positive tone. If wrong, and the Aud does head higher, then expect offers at around 0.9375 and then at the weekly cloud base which has come down sharply and this week sits at 0.9385, and if seen should prove quite strong resistance ahead of 0.9400.
All up a test of 0.9300 would not surprise, an I would use 0.9340/0.9280 as a guide
Economic data highlights will include:
RBA Minutes
Jim LanglandsFX Charts www.fxcharts.com.au
