MIDDAY SNAPSHOT & ANALYSIS OF SELECTED RATES
The Euro failure above 1.4300 in European trade set the tone for the US session with traders seemingly caught poorly positioned and suffering from an early sell-off in the major. The release of the weaker US consumer confidence report did not help, with Euro setbacks accelerating to clear stops below 1.4200. A pullback in US equities along with some bearish reversals in commodity prices also failed to inspire any renewed investor risk appetite with talk of a German bank needing extra capital attributed to the relative underperformance in the Euro. The Australian Dollar remained impressively well propped despite the damage to other correlated markets, with the overnight upbeat comments from RBA governor Stevens perhaps helping.
ANALYSIS OF SELECTED RATES
Aud/Jpy: The rally off of the June 13 lows has been unable to hold above the 78.6% fib retrace off of the 80.45-70.75 move to set up a potential bearish shooting-star top formation on the daily chart. Look for Tuesday’s 79.30 high to now cap ahead of a more significant pullback over the coming days back towards the 75.00-76.00 area. A break below 77.00 is now expected to accelerate declines. Only back above 79.30 negates.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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