The main focus today will be on a spate of economic data coming out of Japan, China and Australia . The Japanese data seldom moves the market but the Chinese CPI and industrial production data is always closely watched.
AUD/USD has been consolidating in a tight 75 pip range post RBA but I’d expect to see some bigger moves today. The Australian unemployment rate is forecast to edge higher and the Chinese data will also impact on the AUD. The market seems keen to try and pick a top on AUD/USD, especially with the possibility of increased RBA intervention, but the daily chart (see attached) is showing few signs of topping just yet. Some may even look for a buy signal when the 50MA crosses the 100MA. Personally I prefer to wait for a test of stronger technical resistance levels near 1.0700 before trying the contrarian trade. There are stop-loss orders reported above 1.0615 and they will also be a target.
AUD/USD daily chart
The BOJ will end their 2-day meeting today and the market is not expecting any surprises from them. Machinery orders data will also be released and this gives a good indication of how the powerful Japanese industrial base is performing. USD/JPY is tied in between corporate offers starting above 78.75 and semi-official bids near 78.00.
The possibility of a double-top on the short-term EUR/USD charts would seem to have been negated, as we traded below the neckline at 1.2340 and have since traded back above there. Interbank reports show much lower levels of interest than is normally the case, though some Sovereign names were reported buying near 1.2330 and another was seen selling at 1.2375. I think they’ve got the idea that it’s a range trading market!
GBP saw some volatility during European trade after the BOE Governor’s comments but it’s been quiet since then and is likely to stay that way in Asia. The NZD might also see some volatility when they release their latest unemployment data.
Good luck today.