AUD/USD: 0.8800EUR/USD: 1.2670The dollar is generally softer again ahead of the NFP due later today and markets will be pretty much on hold until then. It was a wild ride in the equity markets, where European indices suffered substantial losses after Mario Draghi disappointed the market in failing to mention any hint of QE within the EU. US markets have since regained their own losses and will now wait for the Jobs data.
The Aud continues its recovery from the weeks 0.8662 low, today reaching a high of 0.8826 in later NY, after some rather choppy trade either side of 0.8800.
The 4 hour charts still look positive as they continue to unwind their oversold condition and if the NFP is weak a test of 0.8900 could be on the cards.
Above today’s 0.8826 high, further sellers would arrive at 0.8850 (23.6% of 0.7473/0.8862), above which we could see a quick run towards 0.8900 and possibly to 0.8940, although this seems unlikely.
The longer term trend remains to the downside and a strong NFP would see the US$ regain its feet and would return the Aud towards buyers at 0.8740 (100 HMA) and then to 0.8700. Below here looks unlikely today and I would doubt that the Aud heads below the weeks 0.8662 low. If wrong, we could then see a decline towards 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.
Overall it looks to me to remain pretty choppy, but with a mildly bullish bias, but rallies should be used to sell into for the eventual continuation of the downtrend.
Economic data highlights will include:
AIG Services PMI, China National Day.
Jim LanglandsFX Charts www.fxchartsdaily.com
