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1 Jul 2014
AUD/USD: Hard time to eat 0.9320-40 supply away
FXStreet (Bali) - AUD/USD rose to retest once again the sticky supply area at 0.9320-40, which continues to hold strong ahead of today's risk events, which will see the two series of Chinese PMIs published (government and HSBC) ahead of the RBA monetary policy meeting, suggesting plenty of volatility guaranteed.
Heaviness in US yields along with massive sales of US Dollar on month-end/quarter flows, managed to ease the early Monday selling pressures on the pair, which had seen the exchange rate decline as low as 0.9387 before the abrupt bounce.
Jim Langlands, Founder at FXCharts, notes: "Today’s action will all be related initially to the Official and the HSBC China Mfg PMI’s, which are forecast to improve, after which the focus will turn to the RBA statement, where Glen Johnson will most likely repeat his mantra that the Aud is too high. Before then it will be pretty quiet but an overall dovish economic outlook from the RBA following the recent softer tone in the data, would probably see the Aud test lower levels."
Technically, Jim adds: "The indicators though are not generally bearish at all and so caution should be warranted if short. Back below 0.9400, and the session lows at around 0.9385, would find bids at 0.9380 (daily Tenkan) and then at the recent low at 0.9352 (38.2 % of 0.9210/ 0.9444). This, in turn, comes ahead of the 18 June low at 0.9320, where the daily Kijun will provide support ahead of the cloud top at 0.9306. On the topside, 0.9440 has proved to be a bit of a hurdle and we need to overcome that in order to progress towards 0.9460. Beyond here, would suggest an attempt on 0.9500 (0.9495: 76.4% of 0.9757/0.8660)..."
Heaviness in US yields along with massive sales of US Dollar on month-end/quarter flows, managed to ease the early Monday selling pressures on the pair, which had seen the exchange rate decline as low as 0.9387 before the abrupt bounce.
Jim Langlands, Founder at FXCharts, notes: "Today’s action will all be related initially to the Official and the HSBC China Mfg PMI’s, which are forecast to improve, after which the focus will turn to the RBA statement, where Glen Johnson will most likely repeat his mantra that the Aud is too high. Before then it will be pretty quiet but an overall dovish economic outlook from the RBA following the recent softer tone in the data, would probably see the Aud test lower levels."
Technically, Jim adds: "The indicators though are not generally bearish at all and so caution should be warranted if short. Back below 0.9400, and the session lows at around 0.9385, would find bids at 0.9380 (daily Tenkan) and then at the recent low at 0.9352 (38.2 % of 0.9210/ 0.9444). This, in turn, comes ahead of the 18 June low at 0.9320, where the daily Kijun will provide support ahead of the cloud top at 0.9306. On the topside, 0.9440 has proved to be a bit of a hurdle and we need to overcome that in order to progress towards 0.9460. Beyond here, would suggest an attempt on 0.9500 (0.9495: 76.4% of 0.9757/0.8660)..."