AUD/USD: 0.8320EUR/USD: 1.2440General dollar weakness and a growing risk-off sentiment has been the main theme today on the back of another big slide in the oil price. More of the same could be in store as stock markets look increasingly heavy. There is a fair bit of data due, headed by the EZ CPI’s, Targeted LTRO, Swiss IR decision and the US Retail Sales. Australia gets the Jobs data, and the RBNZ has just left rates unchanged, with the Statement causing the Kiwi to spike higher.
Having headed to a session low of 0.8264 following yesterday’s Consumer Confidence data and the China CPI, the Aud eventually managed to bounce to a high of 0.8347 in early NY before giving up those gains and then drifting back to 0.8300 late in the day.
Traders are now looking to the local Jobs data (exp 6.3%, +15K, PR 64.6), with the headline rate expected to rise from the current 6.2%. A weak result will increase the calls for the RBA to cut rates and would once more pressure the downside for the Aud as yield differentials evaporate.
On the downside, the points to watch will be at yesterday’s session low of 0.8264 and the previous day’s low of 0.8225, below which would make a quick run to 0.8200 although given the current general US$ weakness I suspect it will take a pretty awful jobs figure to see it down here today. Below 0.8200 would be a bit of a black hole for the Aud, with not a lot of support to hold it up until 0.8100 and the May 2010 lows at 0.8066.
On the topside, back above the 100 HMA at 0.8315 could see a return to the session high of 0.8347 and to the Fibo level/descending trend resistance at around 0.8360. Beyond there could then head on to the 200 HMA at 0.8385, which if seen should be a reasonable sell. If wrong, a move above 0.8400 would see a run to last Thursday’s 0.8428 high and then to 0.8440 (38.2% of 0.8795/0.8225).
Overall look for another choppy day, possibly ending up close to current levels, but I would be surprised to see the Aud take out the 0.8225 trend low at this stage.
Economic data highlights will include:
Unemployment, Consumer Inflation Expectation.
Jim LanglandsFX Charts www.fxchartsdaily.com
