Euro, Sterling and Aussie are up slightly this morning against Dollar but still in no man's land. With CPI numbers due in about two hours event risk is high today. Without strong conviction it might be better to go flat into the action. I am sticking to my “plan” not to look for Dollar longs at these elevated levels. We may not have seen the tops yet, but then I'd rather miss a few pips.
I created a poll on my Twitter account about the CPIs. Maybe you want to participate? Just click on the link below.
EURUSD -- 0.9725
The currency pair is trying to bottom out short-term around 0.9671/68. In the bigger picture the pair is trading in clearly bearish territory below its 50 ema (0.9943) and the red descending trend line. Above parity the bearish scenario is over. Next real support comes in at 0.9536 (lod 28sep). So the current spot level is quite in the middle of the recent 0.9536/1.0000 range. Difficult!
GBPUSD -- 1.1163
Sterling has recovered nicely after Wednesday's sell-off. A daily close above the mid Bollinger band (1.1149) and in particular above Wedneyday’s hod at 1.1180 could strengthen the bulls. Below the recent low at 1.0924 I recommend to get rid of longs. But as you can see, the daily key levels are far away and barely tradable. Also difficult!
AUDUSD -- 0.6286
The Aussie has a strong positive correlation to equity markets and was therefore under particular pressure. With a CPI number well below expectations today the market could cheer at least for some time and the Aussie should benefit from it. But how likely are low CPI numbers? In the larger picture, however, 0.6200 could be an interesting buy level (see weekly chart).
Good luck,
Sebbo
Nice