Dollar stabilizes a bit after yesterday's sharp selloff. Asian stocks are generally higher following yesterday's strong close in US equities but pare gains as the session goes, thus giving some support to the greenback and Japanese yen. There is prospect of some more recovery in the greenback considering that dollar index is now pressing key support level at 74.94. Also, gold is retreating mildly after hitting channel resistance. Nevertheless, the case for reversal in dollar is weak and more downside is still in favor until we see reversals in stocks and gold.

UK RICS house price balance for October improved more than expected to 34%. The data means the number of real-estate agents saying prices rose exceeded those reporting declines by 34 percentage points, a significant improvement over September's 21 percent points. BRC retail sales Monitor rose 3.8% in October, also much better than September's 2.8%. Nevertheless, Sterling was not supported by the data and retreats against major currencies today. UK trade balance and DCLG house price index will be released later today.

From Eurozone, German CPI is expected to be finalized at 0.1% mom, 0.0% yoy in October. German ZEW economic sentiments is expected to drop slightly from 56 to 55 in November. EUrozone ZEW, on the other hand, is expected to climb slightly to 58.

Looking at the dollar index, intraday bias remains on the downside as long as75.50 minor resistance holds. Sustained trading below 74.94 low will confirm that whole medium term fall from 89.62 has resumed and should target next medium term support at 74.31 next. On the upside, above 75.50 will turn intraday bias neutral and bring consolidations. But break of 76.82 resistance is needed to indicate that the index has bottomed out. Otherwise, outlook will remain bearish.

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AUD/USD Daily Outlook

Daily Pivots: (S1) 0.9226; (P) 0.9266; (R1) 0.9338; More

At this point, intraday bias in AUD/USD remains on the upside as long as 0.9233 minor support holds. Sustained break of 0.9326 high will confirm medium term rally resumption and should target 0.9849 long term top next. On the downside, below 0.9233 will indicate that an intraday top is in place and will bring retreat to 4 hours 55 EMA (now at 0.9146).

In the bigger picture, the rebound from the channel support, as well as the choppy corrective look of the fall from 0.9326, both suggest that medium term rally is still in progress despite loss of upside moment. Break of 0.9326 will bring rally resumption towards 0.9849 long term high next. On the downside, sustained trading below the channel support (now at 0.8988) will in turn indicate that AUD/USD has topped out in medium term. Further break of 0.8915 support will confirm by completing a double top reversal pattern and should bring deep pull back to 0.7702/8262 support zone.

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Economic Indicators Update

GMTCcyEventsActualConsensusPreviousRevised
23:50JPYCurrent Account Total (JPY) Sep1.34T1.53T1.23T 
23:50JPYJapan Money Stock M2+CD Y/Y Oct3.30%3.20%3.00% 
0:01GBPBRC Retail Sales Monitor Oct3.80%--2.80% 
0:01GBPRICS House Price Balance Oct34%29%22%21%
0:30AUDNAB Business Confidence Oct16--14 
5:00JPYEco Watchers Survey: Current Oct40.943.943.1 
6:00JPYMachine Tool Orders Y/Y Oct P-42.60%---61.90%-62.10%
7:00EURGerman CPI M/M Oct F 0.10%0.10% 
7:00EURGerman CPI Y/Y Oct F 0.00%0.00% 
9:30GBPVisible Trade Balance (GBP) Sep -6.100B-6.240B 
9:30GBPDCLG UK House Prices Y/Y Sep -4.90%-5.60% 
10:00EURGerman ZEW Economic Sentiment Nov 5556 
10:00EURGerman ZEW Current Situation Nov -70-72.2 
10:00EUREurozone ZEW Economic Sentiment Nov 5856.9