The AUD was quite interesting, rallying strongly despite a much greater than expected rise in the unemployment rate, a sure sign that a market is short. Any dips now back towards today’s opening levels at 1.0210/20 should be well supported whilst resistance levels at 1.0310/20 should also be hard fought.
EUR/USD should also be interesting. The Spanish downgrade illicited a bit of an over-reaction from the market, sending EUR/USD down from 1.2890 to 1.2850 and then triggering stops below 1.2850. The 200-day MA held well once again and we’ve had a relieving bounce. EUR/AUD selling has also been an important factor. I have a feeling that Europe may target the downside first up but whichever side is tested, a wide 1.2750/1.2950 range will surely contain prices for the next few sessions.
Cable is also interesting, with Sovereign buyers lined up 1.5950/70 and real-money funds selling into rallies. I like the buy-dip play here especially with EUR/GBP still looking soft.
Hopefully we should be in for an interesting and volatile session, driven by trading and not just news headlines++