RBA on hold as Euro retreats further

The AUD was trading with a slight bid bias heading into the RBA announcement following stronger trade data in December and with the central bank deciding to leave rates at 3% (20% chance if a cut) further strength can’t be ruled out especially with the crowded positions in EUR/AUD which is now below the 1.3000 level. The statement from the Australian central bank following the decision was deemed to keep an easing bias but for now the RBA are in a holding pattern waiting see the effects of the December cut on domestic demand and growth.

All eyes will be on European peripheral bond yields again today as the European political circus continues with Spanish PM under serious scrutiny for alleged corruption and the thought of the Eurozone having to negotiate an OMT agreement with Silvio Berlusconi sending shivers through any European politician.

Today’s data concentrates on Service PMI data across Europe and the UK with service sector ISM scheduled to be released along with the IBD/TIPP economic optimism index and MBA mortgage applications this afternoon.

EUR/USD

Supports 1.3450-1.3380-1.3250 | Resistance 1.3550-1.3580-1.3630

USD/JPY

Supports 91.80-91.20-90.50 | Resistance 92.80-93.10-93.60

GBP/USD

Supports 1.5730-1.5705-1.5675 | Resistance 1.5780-1.5815-1.5885

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