AUD/USD: 0.8620EUR/USD: 1.2425The dollar recovered some of Friday's losses against the other majors, seen after the slight miss in the NFP data, and assisted by a Fed report today that shorter term rates might need to rise sooner than previously expected. Today is Remembrance/Veterans Day, with partial European and a US holiday, so we should not be expecting too much action in the coming session. Focus in Asia will be on the Japanese Current Account and Machine Tool Orders and on the Australian Business Confidence and House Price Index. Apart from that there is little to go on so it may be a session for catching up on the admin
The Aud is lower again, currently sitting just above 0.8600, having been up to a high of 0.8682, before a generally bid tone in the US$ put all the majors under pressure during the NY session.
The Q3 house price index and the NAB business confidence/conditions data are due (and maybe Chinese New Loans) and if soft will add further pressure to the downside. Below 0.8600 would see a run towards 0.8570 and then possibly to last week’s low at 0.8540. As we said yesterday, this will provide very strong support, being both 50% of the move from 0.6006/1.1082 and also the base of the monthly cloud. A break of this level though, and a November close below it, would have very bearish implications, for a test of the major channel base at around 0.8474 and then the May 2010 lows at 0.8066.
If the data is firm, we could see a recovery back towards 0.8650 and possibly to the 0.8682 session high. The short term indicators suggest this to be a bit unlikely and overall a session of sitting close to 0.8600 would not surprise.
Economic data highlights will include:
House Price Index, NAB Business Confidence/Conditions, China New Loans?.
Jim LanglandsFX Charts www.fxchartsdaily.com
