Aussie surges across the board and takes out 0.83 level against dollar following upbeat comments from RBA Governor Stevens. Stevens said that the down turn in Australia turned out not to be one of the more serious ones of the postwar era, and there are more upside risks to the outlook which balance out the downside ones comparing to six months ago. THe rise in unemployment was also a little slower than feared. The comments led some economist believe that there won't be further rate cuts from RBA unless there are fresh shocks from the global economy and the bank might turn out to be the first major central banks to withdraw stimulus policies.
Technically, AUD/USD's firm break of 0.8262 high confirms that whole medium term rally from 0.6008 has resumed and would now be targeting 0.85 region. AUD/JPY's break of 78.37 resistance also confirms that corrective fall from 80.43 has complete with three waves down to 70.74 which in turn solidify the case for an eventual new high above 80.43. The development also affirm the view of more broad based weakness in Japanese yen.
Elsewhere, Asian stock markets are mixed with Nikkei nearly flat. Crude oil and Gold consolidate in tight range below yesterday's high. Dollar remains generally soft but is still managing to hold above recent low against Euro, Sterling and Swissy. But USD/CAD extends recent decline and reaches as low as 1.0759 so far. Dollar index's break of 78.42 low suggests that recent fall is resuming and intraday bias is cautiously on the downside for 78.33 low first and then next key support of 77.69. Though, above 78.83 minor resistance will bring more consolidation below 79.66 resistance before resuming decline.
On the data front, New Zealand Trade balance unexpectedly turned deficit of -417M in June. Swiss UBS consumption indicator rose from 0.75 to 0.96 in June. UK CBI distributive trades is expected to rise from -17 to -12 in July. S& P Case-Shiller 20 city house price is expected drop -17.85% yoy in May, slower than -18.12% yoy in April. US Conference Board Consumer COnfidence is expected to drop slightly from 49.3 to 49.1 in July.
AUD/USD's break of 0.8262 high confirms that whole medium term rise from 0.6284 has resumed. At this point, intraday bias remains on the upside for next target of 61.8% retracement of 0.9849 to 0.6008 at 0.8382. On the downside, below 0.8233 will turn intraday outlook neutral and bring consolidation. But short term outlook will remain bullish as long as 0.8089 support holds.
In the bigger picture, there is no change in the broader view that price actions from 0.6008 are correction to down trend form 0.9849 only. Rise from 0.6284 is the last leg and should be near to completion. While another rise is in progress, upside is expected to be limited by 0.8382/8519 resistance zone (61.8% retracement of 0.9849 to 0.6008 at 0.8382) and finally bring reversal. On the downside, below 0.7702 support will now be an important signal that AUD/USD has topped out and will turn short term outlook bearish for deeper decline.
Economic Indicators Update
|22:45||NZD||Trade Balance (NZD) Jun||-417.0M||214.0M||858.0M||907.0M|
|3:00||AUD||RBA Governor Stevens Speaks||--||--|
|6:00||CHF||UBS Consumption Indicator Jun||0.96||--||0.77||0.75|
|10:00||GBP||U.K. CBI Distributive Trades Jul||-12||-17|
|13:00||USD||S& P/Case-Shiller Composite-20 Y/Y May||-17.85%||-18.12%|
|14:00||USD||Conference Board Consumer Confidence Jul||49.1||49.3|