AUD/USD: 0.8550EUR/USD: 1.2510The dollar is generally a little weaker today after some soft US data hinted that US economic growth may be losing momentum, and also on the back of some position squaring ahead of the Thanksgiving weekend. Today's focus will be on the EU data with the German CPI, Unemployment and EZ Consumer Confidence being the main interest. The outcome of the OPEC meeting will also be closely watched. Australia gets New Home Sales, Private Capital Expenditure data; and NZ, the Trade Balance.
The Aud fell sharply from 0.8565 to a new trend low of 0.8480 today, helped by a large order to buy Eur/Aud in Europe. The softer US data then put the US$ under some pressure of its own, underpinning the Aud and allowing a steady recovery ever since, to currently sit back close to the session highs.
For the time being, we may have seen a short term base on the downside, and a bit of a squeeze back towards 0.8565 and possibly to 0.8600 (100 HMA) would not really surprise. Above there would head back into the choppy consolidation area, where resistance at 0.8640 (200 HMA) and at 0.8670 would be targets, ahead of a possible run back to 0.8700.
The downside will see bids today at 0.8530 and at 0.8515 ahead of 0.8500. I would be quite surprised to see a return to 0.8480 today, but if wrong then look for decent bids to hold the Aud at the base of the major channel at the 0.8450 area. A break of this would see a bigger decline towards the May 2010 lows at 0.8066.
The medium term view remains one of selling rallies, and with the Iron Ore price now under $70 per tonne, any move back above 0.8600 would begin to look attractive - unless the US$ runs out of steam - in which case the Aud could put in a stronger run to the upside.
Economic data highlights will include:
New Home sales, Private Capital Expenditure.
Jim LanglandsFX Charts www.fxchartsdaily.com
