AUD/USD: 0.9350EUR/USD: 1.3590A weak Sentix Investor Confidence survey kept the Euro under pressure today while firm US Treasury yields generally underpinned the US$. Chinese data will be the focus in the coming session, in the absence of any numbers due from either the EU or US, in what looks likely to be a fairly rangebound session. Australia will get the NAB Business Confidence/Conditions and ANZ Job Ads while the UK will see the Industrial Production numbers.
Despite several EU countries being on holiday today, the Sentix investor confidence index was released and unexpectedly dropped to 8.5 in June, against an expected rise from 12.8 to 13.3, the lowest reading in 6 months. This put the pressure back on the Euro, which is currently at near session lows and back below the 200 DMA (1.3652), having earlier made a brief run higher, to 1.3668, where sellers capped it before pushing it lower again. At the same time, the DXY (Dollar Index) is back above the 80.60 resistance, currently at 80.67, having had a positive session and generally looking encouraging for further gains in the days ahead, although there is very little data out today from either the EU or the US, so it could be a rather rangebound session, with any movement likely to be on the back of some political/central bank comment.
Now back below 1.3600, the hourly charts are oversold, and thus the downside momentum may slow somewhat over the coming session. However, the 4 hour charts are looking somewhat negative and if we can take out the bids in the 1.3575/85 area then we may accelerate towards 1.3560 (27 Feb low). Below there, which may be a bit of a struggle today, would hint at a return to 1.3520 (38.2% of 1.2754/1.3995) and 1.3500, where there would be very strong buying interest. The base of the rising wedge, at around 1.3440, is the target at which we would be squaring up shorts, but is some way off at this stage.
On the topside, 1.3600 will see the initial sellers, above which could see another run back towards 1.3640 and beyond there to the 1.3565/75 area where the Euro has so far topped out following the ECB easing last week. A break of this area would target 1.3687 (38.2% of 1.3993.1.3502) and then 1.3700, above which would head quickly back towards the mid May peaks in the 1.3725/35 and 1.3770/75 area and then the 50% pivot of the whole move down from 1.3993 at 1.3746, which is also the daily Kijun, followed by the 61.8% target at 1.3805, which is where the base of the daily cloud also lies and should therefore be strong resistance.
For the coming session, I suspect we are going to use 1.3600 as a magnate and that 1.3580/1.3630 should probably cover it.
Jim LanglandsFX Charts www.fxcharts.com.au
