Currency Updates:
The AUD got sold very heavily again on Friday after comments from the Chinese FinMin were interpreted as meaning that economic growth forecasts are likely to be lowered. These comments were revised in weekend official Chinese press reports and this has helped the Aussie make a modest recovery. After all this speculation, today’s official China GDP data will be very closely watched and is certain to bring plenty of volatility.
TECHNICALS: The bears regained control of the AUD/USD market on Friday, taking out recent lows at .9035 before stalling ahead of important psychological support at .9000. Selling rallies back towards increasingly-strong resistance near .9300/50 (see chart) seems like the logical play.
CROSSES: EUR/AUD was a big mover on Friday, closing above important longer-term resistance levels at 1.4400 (see chart). This pair looks like it might move onto a higher plane now and I would look to buy medium-term dips towards 1.3900 for moves back to 1.5500.
AUD/JPY broke back below 90.00 but hasn’t yet managed to take out important technical support between 89.00/50; if this happens then we can expect the AUD sell-off to pick up steam. AUD/NZD is consolidating recent losses and targeting 1.1500.
ORDERS & FLOWS: Very strong bids at .9000 in the AUD/USD managed to hold firm on Friday night.
INTRADAY CONCLUSION: The Chinese GDP data will determine what happens to the AUD in the short-term. The market is bearish and selling on the crosses has picked up steam. Nevertheless the bids at .9000 were very strong indeed on Friday night. Keep a close eye on the crosses like EUR/AUD and AUD/JPY, as much of the action is happening there.
TRADE OF THE DAY: I quite like the look of the EUR/USD at present, with demand for the single currency increasing on the crosses. Buy intraday dips to 1.3030, with stops below 1.2980, looking for 1.3150.
