AUD/USD: 0.9375EUR/USD: 1.3605The dollar is a little weaker today as the markets digest last week’s strong U.S. employment report, with focus now turning to Wednesday’s FOMC minutes and with the markets wondering when the Fed is likely to begin raising U.S. interest rates. Today could be rangebound, with not too much to provide inspiration, although we do get the German Current Account & Trade Balance and also the UK Industrial & Manufacturing Production, which might provide some direction for Cable. Early Asia will get the NZ Business Confidence and then from Australia, the NAB Business Confidence/Conditions
The Aud continues to recover from its post-NFP selloff, when it reached 0.9328, and is now stabilising back near the rising trend line that previously acted as support, now resistance and assisted higher today by the generally soft tone in the US$.
While the daily charts still look heavy following the sharp selloff from 0.9505 last week, the short term charts do look a bit more positive, so we could be in for a squeeze back towards 0.9400. It will be the NAB Business Confidence/Conditions that dictate direction, but if we can continue higher, the points to watch will be at 0.9380 (minor) and then at 0.9390 (100 HMA). Above 0.9400, where good selling interest is reportedly to be seen, the 200 HMA is at 0.9406. I doubt we head much above here today, but if wrong 0.9420 and then 0.9435 (61.8% of 0.9505/0.9328) will be targets.
On the downside, the 50% pivot of 0.9210/0.9505 is at 0.9355. A break of this would find minor bids at 0.9335 ahead of last week’s 0.9328 low and 0.9320 (61.8% of 0.9220/0.9505/18 June low). A break of this would most likely see an acceleration down through 0.9300 to 0.9275 (76.4%), but not for a while.
We have the Consumer Confidence data tomorrow and the Jobs data on Thursday. Neither of these look likely to be anything special, so the overall strategy of selling into short term strength would appear to make sense.
Use 0.9350/0.9400 as a guide.
Economic data highlights will include:
NAB Business Confidence/Conditions
Jim LanglandsFX Charts www.fxcharts.com.au
