AUDUSD: Aud heavy ahead of trade data by FX Charts

The Aud is sitting near 0.7600 after a European sell-off, to a low of 0.7582 before a recovery, to 0.7640 after the poor US data. It has been unable to hang on to its gains though and has since slipped lower as the market looks towards today’s Feb Trade Balance, which is forecast to deteriorate to Aud$-1.3bio from the prior Aud$-980 mio.Iron Ore has today fallen to new lows at US$49.50 per tonne which wont help the Aud today.

Below today’s 0.7581 low will find decent bids at the 11 Mar low at 0.7559, which will probably hold until Friday’s NFP. If wrong, a break of this would then hint at a run to the RBA’s stated target of 0.7500, and as before, I think we are eventually heading there and a fair bit lower over time. Below 0.7500 there is not too much to hold the Aud ahead of 0.7414 (Oct 2010 low) beneath which there is a bit of a hole until the very strong support at around 0.7200 where two important Fibo levels are lining up (0.7210: 61.8% of 0.4773/1.1082 and 0.7180:76.4% of 0.6006/1.1082). I suspect that eventually 0.7000 will appear on the horizon (and eventually 0.6000!), but this is going to be some way off yet.

Rallies today should once again be limited to around 0.7640 although we could see a run towards 0.7665 if the Trade data surprises to the upside. I don’t think we head above here today, but if wrong, then 0.7700 and possibly the Fibo resistance at 0.7725 (38.2% of 0.7937/0.7590) would come into view.

Economic data highlights will include:

TD Inflation, Trade Balance.

…