It’s been a fairly quiet 24-hours in the FX market with the main players happy to sit back and wait for big central bank risk event later in the week, followed of course on Friday by NFP data. The AUD has weakened again across the board and the Yen has stayed strong amidst consistent positional liquidation from the bigger speculative players.
The main risk event on today’s economic calendar will be the lunchtime speech by the RBA Governor. He will undoubtedly choose his words very carefully this time, depending on whether he wishes to fuel or dampen expectations regarding an August rate cut.
USD/JPY has stalled on 3 separate occasions at technical support near 97.60 and there does seem to be the prospect of a relief rally back towards 99.00 as long as this holds. However, a break below 97.50 is likely to trigger more stop-loss selling and would have the bears in control for a test of 96.75.
There have been reports that some of the big macros are looking to sell rallies in pairs like CAD/JPY and GBP/JPY, so keep these on your radar.
EUR/JPY is stalling near Fibo support levels and AUD/JPY is back at the lower end of its recent ranges and is eyeing strong support levels below 89.50.
EUR/USD was unable to break above a well-defended option barrier at 1.3300 and has drifted lower; support levels don’t strengthen until 1.3180/90.
AUD/USD was unable to maintain its place above short-term support at .9230 and this level now becomes intraday resistance. The downside target is at .9130 and if Stevens confirms a rate cut next month, this level will be tested.
AUD/NZD has been unable to regain 1.1500 and the technical target is around 1.1375. EUR/AUD has closed back above 1.4400, giving the bulls some added momentum.
Good luck today.
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