AUD/USD: 0.8785EUR/USD: 1.2800General US$ weakness developed through the session and it is closing near its lows against most of the other majors. With little EU or US data due today, focus will be on the China data, headed by the GDP. Estimates are of a Q3yy 7.2-7.5% rise although some analysts suggest that the number may be below 7% which would put another dent in global growth prospects. If so, look for another sell-off in equities and commodities in particular. Elsewhere, Asia also gets the WBC Leading Index & RBA Minutes. Later on, US existing home sales will provide the interest
The Aud was underpinned early on Monday after the Japanese Nikkei reported a revamped asset allocation for the Government Pension Investment Fund (GPIF), whereby foreign stock and bond holdings will be increased up from 23% to 30%.
General US$ weakness further underpinned the Aud as it headed steadily higher through the day and is closing the NY session on its highs just below 0.8800.
Today’s Chinese data will drive direction, and any upside surprise to the GDP (exp 7.2% yy Q3, 1.8% mm) will improve risk sentiment and could see a run to the topside in the Aud where, above 0.8800, the initial resistance will be encountered at around 0.8820, a break of which would head towards 0.8841 (23.6% of 0.9504/0.8641). Beyond there would see a run to 0.8860 (15 Oct high) and possibly to 0.8894 (9 Oct high).
The downside looks reasonably well protected today (unless the China GDP badly misses expectations) and bids will arrive at around 0.8760 (100/200 HMA’s) ahead of the session low at 0.8746. Below here looks a bit unlikely, but if wrong, further losses would head to Friday’s lows around 0.8730 and then to 0.8700. I doubt that we are heading below here for a while, but if wrong, would hint at a run towards last week’s lows at 0.8685, 0.8675 and below there at 0.8651.
The RBA Minutes will also be in focus today but are likely to repeat the recent mantra of continuing the current course of “steady as she goes”.
Economic data highlights will include:
WBC Leading Index, RBA Minutes, China GDP, Industrial Production, Retail Sales, Urban Investment, RBA Lowe Speech.
Jim LanglandsFX Charts www.fxchartsdaily.com
