AUD/USD: 0.9383EUR/USD: 1.3535In a generally choppy session, Yen strength was the main feature of the day, with the market sensing little action from the BOJ to ease policy further, either tomorrow or in the months ahead. The RBNZ has just raised rates which has meant a lively start to the Asian session, as the Kiwi breaks up through 0.8600. Later this morning we will get the Australian Jobs data. The focus will then turn to the ECB Monthly Report and then the US Retail Sales.
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The Aud remains bid, having triggered some stops above 0.9400 (high 0.9405) after some minor US$ weakness, but has been unable to make further gains after running into some headwinds from sales of Aud/Jpy today.
Whether 0.9400 can be overcome will depend on today’s domestic unemployment data where the market expects a rise of 10K (jobs created) and a headline rate, unchanged at 5.8%. If the number is worse than expected, – and some economists are tipping a rise to 5.9%, – we can expect the Aud to retreat back towards minor Fibo support and the former channel top at 0.9365. Below here would suggest a false upside break out of the channel and would head back towards the 100 HMA at 0.9355 and then 0.9335 and potentially 0.9315 (200HMA) although this looks doubtful.
Having broken above the top of the channel and with the dailies looking positive for further medium term gains, the first hurdle to overcome will be today’s peak at 0.9405 and the 14 May high at 0.9408. If/when this area gets taken out, look for a run up to 0.9425 and eventually to the 10 April high at 0.9460.
Buying dips remains the preferred strategy and 0.9365/9410 may cover it today, depending on the data.
NB>The Aud just traded at 0.9410 after the RBNZ raised rates, but is equally quickly back to where it started at 0.9383.
Economic data highlights will include:
Unemployment, China leading economic Index
Jim LanglandsFX Charts www.fxcharts.com.au
