AUD/USD: 0.9375EUR/USD: 1.3525It was a rather quiet day on all fronts, with the general theme being one of risk avoidance as traders look to political manoeuvres for guidance and it would appear that we are in for more of the same today. Risk events will come from RBA speeches from both Stevens and Debelle, after which there is little to go on until the release of the US CPI later in the day. Another quiet one looks likely
With the Euro closing at around 1.3525 for the fourth successive day, there is really very little to add except to hope that the US CPI, due later in the coming session provides us with some action.
We did get a brief run up, in Asia, to 1.3548 but that was quickly snuffed out and we are back where we started. There are apparently some leveraged bids sitting in the 1.3500/10 area, so this may once again be a difficult area to break down through, particularly given the IMM data released on Friday, indicating that speculative net EUR/USD short positions are at their highest level in a year.
The technical levels remain unchanged.
On the topside, sellers are still placed above 1.3550, with more to be seen at 1.3570 and 1.3585, ahead of 1.3600. Given the ongoing negative look of the daily indicators, I don’t really see it back above 1.3600 today, but if wrong, and the Euro does head higher over the next couple of days, offers in the 1.3640/50 area remain solid, where the minor Fibo resistance at 1.3646 (61.8% of 1.3700/1.3562) would provide strong resistance. A break of this level would see the Euro head on to 1.3665 (76.4%/ daily cloud base/200 DMA) but now looks a long way off. Further out, the Euro would find sellers at 1.3700, a break which would see a run up towards 1.3730(100 DMA), which should be solid resistance although a break of this level would head on towards 1.3803 (61.8%).
On the downside, 1.3500 is again looking fairly solid support ahead of the important level at 1.3476 (24 Feb low). A break of this would hint at an acceleration lower, and there is then not too much support to be seen ahead of 1.3415 (200 WMA). Below this, 1.3370 (50% pivot % of 1.2754/1.3995) and eventually 1.3300 (100 WMA) and 1.3294 (7 Nov ’13 low) would come into view.
Wait for the US CPI. Should it come in line with expectations, then we are probably in for more of the same but some economists are calling for the number to come in above the expected 2.1%yy / 0.2%mm figure, in which case the dollar might actually give the 1.3475 area a nudge.
Economic data highlights will include:
US CPI, Existing Home sales, House Price Index, Richmond Fed Activity Index
Jim LanglandsFX Charts www.fxcharts.com.au
