AUD/USD: 0.8830EUR/USD: 1.2610It has been a mixed day following the release of the solid US GDP number, with the US$ generally holding on to the post FOMC gains, performing particularly well against the Jpy after talk of an asset reallocation for the GPIF. Stocks have done well taking the Aud along for the ride, while metals, especially Silver, took a hit. Today will look to the EU CPI for guidance, where another weak reading will see the Euro come back under pressure. Before then, Asia will see plenty of Japanese data as well as the BOJ meeting. The US sees Personal Consumption/ Income/ Spending, Rts Michigan Consumer Confidence Survey. Have a good w/e.
After trading heavily for the first half of the session, the Aud bounced off trend line support at 0.8760, seen briefly after the US GDP release, and has since climbed steadily and impressively to a high of 0.8840, helped in part by purchases of AudJpy, which has pushed up to a high of 96.68 following the GPIF announcement.
Further short term gains look possible and if we can crack 0.8840 we could then see a run towards 0.8860 and it could be that we retest yesterday’s high at 0.8910, although I think that it may be a stretch too far today. If we do see it near 0.8900 I think it may be a sell while it trades within the channel formation seen on the chart below. Stops should be left above 0.8950, or ideally above 0.9000.
The downside will today see bids at 0.8820 (100 HMA) and then at 0.8800 (200 HMA).Below here may be a bit unlikely, but below 0.8800 would see a return towards 0.8785 and to the session’s 0.8755 low, where the rising trend support should hold it. A break of this would have further bearish implications for a move back towards 0.8715 and then 0.8700. I don’t really see it below here in the near term, but if wrong look for a run towards 0.8680 and eventually to the 0.8641 trend low.
Economic data highlights will include:
PPI, Private Sector Credit.
Jim LanglandsFX Charts www.fxchartsdaily.com
