Currency Updates:
The Australian Dollar (AUD): The pair fell back to a low of 0.8937 in Asia session due to higher USD/CNH. However, Europe saw the downside movement was limited and begun squeezing shorts. 0.90 level was first rejected but USD weakness showed across the board, bulls took advantage and pushed AUD up to a high of 0.9050.
AUD/USD: AUD/USD rallied to 200 DMA and showed no sign of weakness. The recent daily candles occured ahead of the daily cloud base, 21 DMA and 0.8905/25 support zone. Major resistance is still at 0.9080-90, a break would lead bulls eyeing 0.9205/25.
EUR/USD: EUR/USD dipped below the 200 hour MA hit a low of 1.3708. Bulls are still holding up as the pair is still above 10DMA but looking a bit weak. Range trade still in play 1.37/1.3775, no major news event from EZ until Friday so range should hold but if CPI comes in weak, then bears could come back strong as ECB will act to fend off low inflation.
GBP/USD: Option interest and Vodafone merger activities holds cable in 1.6585/1.6685 range. GBP is more likely to benefit from crosses as increased sentiment of the ECB moving shortly to institute further accommodation to help stimulate the EZ economies.
USD/JPY: Nikkei recovered sharply clearing the daily kijun line at 14,970 however, the rally wasn’t enough to help USD/JPY pass the current ressitance range of 102.75-85. Kijun at 102.80, a close above it would break the range and reinforce the recovery.
Looking Ahead – Economic Data (GMT)
• 02:00 NZ RBNZ 2-Year Inflation Expectation Q1 2.34%-prev
• 02:00 CN Conf Board China January LEI
• 05:00 JP Small Business Confidence FEB 51.3-prev
