March 20th, 2012 at 7:09 am
What difference one day makes. On Monday, the commodity currencies have been high fliers, advancing nicely, especially in relation to the US Dollar. Today they reversed, giving back all previous gains, and perhaps even setting the stage for much bigger adverse moves in near future. The minutes of latest RBA meeting, released earlier in the day, did not bring any surprises, causing only minor reactions from the currencies. With no other significant news scheduled before the European session and holiday in Japan, it looked like a quiet day ahead.
Things changed shortly after, when BHP Billiton, the world’s biggest miner, raised concerns about the possibility of a sharp slowdown in demand from China, its top metals consumer. No hard numbers were released, but all of a sudden, everybody remembered that earlier this month China cut its 2012 growth target to an eight-year low of 7.5%. That was enough to send the Australian Dollar, and the other commodity currencies sharply lower. We still have few hours of trading left, and it will be interesting to see if there is another price swing down.
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March 18th, 2012 at 10:28 am
Coming week does not bring as many important fundamental developments as past few days did, and those on the calendar are of somewhat smaller caliber. No policy meetings by central banks and no key unemployment numbers. However, we will have few important inflation data, including the PPI from Germany and the CPI from Canada. In addition, Bank of England minutes are always highly anticipated, so currencies should remain active. Just how active, we could find within few hours of the opening, following the speech by RBA’s Governor Glenn Stevens.
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March 15th, 2012 at 11:28 am
Ever so slowly, the EUR-AUD is in the process of building a bottom pattern on its daily chart. After making an all time low at 1.2131, the price formed what appeared to be small rounded bottom, followed by a fast move to 1.2616. With more price history since, now a possible Cup with Handle formation is taking shape.
For this patter to become official, the EUR-AUD must advance above the high of 1.2616. It is not only a resistance here, but crossing this level would also complete the Cup with Handle pattern. At this point, the EUR-AUD would be officially, from a technical perspective, in an uptrend, with a target of around 1.2950 or so.
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