Reasonably good US economic data did nothing to help commodity prices, with global doom-and-gloom worsening after the RBA comments and Chinese data. The AUD stabilised somewhat after heavy falls in the last few sessions and it was the turn of the CAD and NZD to play catch-up. GBP fell on more EUR/GBP short-covering and the EUR/USD remains stuck at 1.2900. China remains closed this week and Australian retail sales are the main risk event this morning.
The NZD/USD may the most interesting pair in early trade as it’s sitting right on technical support (see chart) and a clean break below .8180 is likely to trigger some large stop-loss selling (potential double-top neckline).
The AUD/USD is consolidating recent losses inside a 1.0195/1.0235 range but its inability to bounce is a very bearish sign. Today’s retail sales data is the next risk event and the next downside technical targets are a daily low at 1.0165 and another low + 50% retracement level at 1.0100 (see chart).
Cable slipped back below 1.6100, driven mainly by EUR/GBP stop-loss buying, but interbank dealers report solid buying interest starting at 1.6055 which will be hard to break during the Asian trade.
EUR/USD saw some good two-way business during early European trade but was unable to break out of its holding range between 1.2870/1.2970 and is mainly being used as a liquidity source for the cross pairs.
EUR/JPY continues to grind higher on the short-term charts (see chart) and this pair will again account for much of the flows during Asian trade.
USD/JPY was quite impressive, climbing above 78.50 despite falling oil prices and general risk-off worries. Noise from new Japanese FinMin with more suggestions of foreign bond buying and other bold measures certainly encouraged the USD/JPY bulls. Not much resistance in sight here until the post-BOJ highs at 79.20.
Good luck today.