AUD/USD: 0.8840EUR/USD: 1.2735The dollar is weaker again today after the dovish tone from the FOMC minutes noted the Fed's concerns over the stronger dollar and the ongoing weakness in the global economy. With no apparent hurry to raise rates, US equity markets have quickly reversed yesterday's steep sell-off and screamed higher as the highly volatile conditions continue. Today's initial focus will be on the Australian Jobs data, which will be followed later by the ECB Monthly Report, German Trade Balance/Current Account and the BOE IR decision- no change expected.
The Aud bounced off session lows of 0.8735 ahead of the FOMC release to sit at the highs, currently at 0.8845, with the shorter term indicators looking as though it could head higher still. We have the Australian unemployment data today though, and a poor reading will quickly take the steam out of the Aud, pushing it back below 0.8800 and potentially back to the session lows at around 0.8730.
The downside does look a bit limited for now, and if the Fibo resistance at 0.8845 (23.6% of 0.9504/0.8642) can be overcome, then there is not a great deal to stop the Aud heading back to 0.8890/00, but which if seen would be another sell opportunity I think. If wrong then the Aud could head on to 0.8965(38.2% of 0.9504/0.8642).
There is no change in the longer term view of an eventual return of US$ strength, although right now it looks to be some way off. Wait for the Jobs data (exp 6.2%/+20K (not including seasonal adjustments)) and note that the ABS announced yesterday that they are changing how they report the numbers, which will add some confusion, and may make for a volatile ride once they are released.
Economic data highlights will include:
Unemployment, WBC Consumer Confidence
Jim LanglandsFX Charts www.fxchartsdaily.com
