Currency Updates:
The market waited expectantly for the testimony from the Fed chairman but it turned out to be somewhat of a non-event. He refused to put a date on any ‘tapering’ of their QE program and said all options remain on the table and data dependant. I would have expected such statements to be more AUD/USD positive (risk positive, USD negative) but absolutely nothing happened.
Today’s economic calendar has Australian business conditions data as well as Chinese house prices.
TECHNICALS: No change in the technical outlook from yesterday, with .9000/.9350 still the big levels to watch and a break either side will cause a momentum shift (see chart). The very short-term trend is bullish so we may see a topside test first but the medium term trend is definitely bearish so big technical levels will be defended.
CROSSES: EUR/AUD continues to drift lower after putting in those fresh weekly highs at 1.4400 and we seem to be in a consolidation phase at present between 1.39/1.44 (see chart). AUD/JPY is following a similar pattern to AUD/USD and the levels to watch there are at 89.00/93.00. AUD/NZD continues to trade quietly around 1.1700 and it needs to break back above 1.1800 in order to put an interim base in place.
ORDERS & FLOWS: Very quiet in this regard over the last 24 hours with no major flows reported and no big order levels close-by. Next batch of sellers are near 0.9325 in AUD/USD.
INTRADAY CONCLUSION: I’m still stubbornly sticking to my ‘base-picking’ view in the AUD/USD and I prefer to buy dips, both on intraday and more medium term basis. Buy on the day near .9170 for a test of .9300.
TRADE OF THE DAY: I still like the look of the topping formation on the EUR/JPY daily chart, so sell rallies to 131.00 with stops above 131.50 looking for 130.00.
Good luck out there.
