AUD/USD: 0.8720EUR/USD: 1.2690The dollar stalled somewhat today as the demonstrations in HK caused some cautious profit taking, with both the Euro and the Yen holding on above trend lows. No such luck for the Kiwi which took another dive and still looks heavy, as does the Aud$. Both will come under further pressure today if the HSBC China mfg data fails to meet expectations, with traders also nervously watching the events in HK. Later in the day, the direction will turn to the German Retail Sales/Employment data and the EU CPI/Unemployment, which comes ahead of the US Consumer Confidence.
Having fallen to a new trend low at 0.8688 yesterday, the Aud eventually managed to find some balance of sorts and squeezed up to 0.8749 in NY before renewed selling interest pushed it back to 0.8730 at the end of the session.
The main focus today will be on the HSBC China September Mfg PMI. The prior reading was 50.2 and a weak reading, especially if it comes in below 50.0 would place the Aud under renewed pressure. Traders will also be keeping a close eye on how events unfold in HK, with any renewed tensions likely to place further weight to the downside.
Technically, today’s low at 0.8688 ties in roughly with the 31 Jan low at 0.8694 and should provide some decent support. If broken, the Aud would want to take a look at long term target at the previous trend low, the 24 January low at 0.8660, which should also act as strong support but below which would then head to the July 2013 at 0.8632. Below here there is little to suggest that the Aud will pull up ahead of the 50% pivot of the long term rally from 0.6006/1.1082, at 0.8538.
On the topside, sellers would again be seen at the session high at around 0.8750, above which, it would head to the descending trend resistance now at around 0.8765. A break of this would trigger stops and would most likely head back towards 0.8800 (100 HMA) and on towards 0.8860 (200 HMA). I don’t see it up here and any rally should be used as a sell opportunity for lower levels which seem likely to lie ahead.
Anyone who wants to get really bearish can check my monthly chart at this link!:
http://www.fxchartsdaily.com/audusd-aud-heading-0-6000-check-monthly-chart/ Economic data highlights will include:
ANZ Business Confidence, Private Sector Credit, RBA Annual Report, HSBC Mfg China PMI
Jim LanglandsFX Charts www.fxchartsdaily.com
