AUD/USD: 0.8550EUR/USD: 1.2460In the absence of a US market today, currencies and equities took a back seat to Oil, with WTI collapsing by 6% after the OPEC decision not to cut output. The dollar is generally a little stronger but it has really been a day of consolidation. The US market will again be very thin today and the focus will be on the EU CPI and Unemployment data. Ahead of that there is plenty of Japanese data, headed by the CPI which could cause some Yen volatility. NZD gets Building Permits, Business Confidence, while Australia gets Private Sector Credit data.
The Aud did pretty much as we had hoped yesterday in heading higher to reach a peak of 0.8615, allowing us to get short into the strength before it gave up much of the ground, and is now back at 0.8550.
The charts are a bit mixed and it could be a sideways session but the hourlies are pointing lower and it would seem that the bias is possibly a bit lower.
The downside will once again see bids today at 0.8530 and then at 0.8515 ahead of 0.8500. I would be quite surprised to see a return to 0.8480 today but if incorrect 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.
On the topside, we could see a bit of a squeeze back towards 0.8585 (100 HMA) and possibly to 0.8600, although if we do it will provide another sell opportunity, I think. that I doubt we are headed much above here today, but further points to watch would be at the session high (0.8615 and then the 200 HMA at 0.8622). Above there would head back into the choppy consolidation area, where resistance at 0.8640 (50% of 0.8795/0.8480) and at 0.8670 (61.8%) would be targets, ahead of a possible run back to 0.8700.
Look for 0.8610/0.8685 to cover it.
Economic data highlights will include:
Private Sector Credit.
Jim LanglandsFX Charts www.fxchartsdaily.com
