Quiet trade overnight which saw the EUR stabilise after falls from the previous day before giving up some of these gains in late US trade on headlines after S&P downgraded Spain, though this was not unexpected.
Most interest today in Asia will focus on the AUD, after the RBA put so much focus on jobs in their last statement. There is a growing feeling in the market that a poor number could lead to a 50bps rate cut next month. EUR/AUD looked like it could fall heavily at times yesterday but has now steadied and should stay that way until the jobs data is released. AUD/USD has initial resistance at 1.0275 and a more important level at 1.0325 (see chart) and there are heavy sell orders reported near the latter. Support levels start at 1.0180 with further support at recent lows near 1.0150. Volatility is highly likely regardless of the number.
EUR/USD continues to hold above the 200-day MA (see chart) and though there was another attempt during Asia yesterday to get below there, the failure led to short-covering taking the pair back above 1.2900 until S&P downgraded Spain at the US close bell, taking the pair down toward 1.2860. Range trading is still the obvious play here, with 1.2900 ahead of hourly high at 1.2960 providing obvious resistance level.
USD/JPY has continued to inch lower and is challenging recent lows near 78.00. No news of note, but solid sell orders above 78.80 are providing the cap.
AUD/JPY should again be the most interesting of the Yen crosses with the market eyeing critical support near 79.30 (see chart) and a break below there could lead to an avalanche of selling.
Sterling is also influenced by flows, with Sovereign buyers in cable below 1.6000 but real money funds selling rallies above 1.6015. This is ensuring that the pair remains range bound in the short-term. EUR/GBP is in consolidation mode but after the failure above .8100, further losses are likely.
Good luck today.