A stronger than expected US Retail Sales reading saw the dollar rebound today against all the major pairs. The Aud hit a new trend low on the back of an RBA call for the Aud to trade at 0.7500, while oil took another hit and is now trading below $60pb. It looks like being a choppy end to the week with the main focus being on China where the Industrial Production and Retail Sales will be closely watched. Later on, the highlight will be the US PPI.
After reaching a high of 0.8375 following yesterday’s unemployment data the Aud slid steadily lower through the rest of the Asian and Europeans sessions, and later on accelerated to a new trend low on the back of the stronger US retail sales and on a press headline that the RBA would like to see the Aud at 0.7500.
Currently at 0.8250, the focus is back on the downside, where the immediate support is seen at the new trend low and then at 0.8200. Below there, there is little support to be seen until the May 2010 lows at 0.8066 although 0.8200 could well hold it again today, but will be largely dependent on the outcome of the Chinese data due later on.
The topside looks likely to see good sellers once more at 0.8280 and then at 0.8300 (100 HMA). Above there could see an acceleration higher, although I don’t really see it getting back to the 0.8375 high again for a while.
Look for a choppy session contained within 0.8200/0.8300.
Economic data highlights will include:
China Industrial Production, Retail Sales, Urban Investment.
Jim LanglandsFX Charts www.fxchartsdaily.com
