The AUD was sold very heavily again on Friday after comments attributed to the Chinese FinMin suggested that economic growth targets might be downgraded. These comments were revised in the official Chinese news-sources over the weekend, which reported that GDP growth is still in line with 7.5% forecasts.
Japan is on holiday today and the main risk event will be in early afternoon trade when Chinese GDP data is officially released.
AUD/USD fell to test reported barriers at .9000 and traded very briefly below the line, but Sovereign buyers were also significant and profit taking kicked in as soon as the bids were proven to be solid. We’ve seen another modest rally this morning after the weekend Chinese newspaper reports, but overall the Aussie remains under significant pressure.
EUR/AUD closed above important weekly resistance near 1.4400 and it looks to have shifted now onto a higher plane between 1.39/1.55. Buying big dips is again the preferred strategy.
AUD/JPY is trading near critical support levels and this level will become a very important pivot I feel.
AUD/NZD is another cross to put in fresh lows and the target here is at 1.1500.
EUR/JPY is trying to form a head-and-shoulders topping formation and risk-reward favours selling rallies with stops above 131.40.
USD/JPY will be driven by what happens in the crosses but with the market long again, and holiday periods approaching, I prefer to be short whilst the EUR/JPY in particular holds below its resistance points.
EUR/USD looks moderately constructive, with strong demand in EUR/AUD and EUR/GBP helping it hold above 1.3000. Most of the action is in the crosses at the moment so I prefer to play the EUR/USD from the long side on an intraday basis.
Good luck today.
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