AUDCAD
The Australian dollar was bid higher on the session in the wake of the suspected UK terror attack plans earlier this morning. The news overshadowed much of what was a monthly widening of Canadas trade balance and a higher Canadian housing price index which would have, under normal circumstances, been a positive for the underlying currency. However, traders took it upon themselves to bid the carry candidate higher with bids coming in strong for the Aussie. Contributing to the Aussie favored buying was a dip in crude oil contracts. With the Bank of Canada likely to keep rates steady at the current standing, the underlying Cad dollar has been subject to increasing crude oil speculation in recent weeks. As a result, with contracts lower on a pull back in the market, the underlying pair was bolstered heading into the Asian session.
Technically speaking, the pair found a support floor at the 0.8600 figure in the overnight and propelled higher making the days gains. However, with considerable selling pressure still on the side of the Aussie major, offers are looking heavy at the 0.8650 level and higher at the 0.8660 figure. Both levels should be able to cap gains in the short term with a break higher giving room for bulls to run. Comparatively, a double top may give way to a lower retest of the 0.8600 figure and possible bottom at the 0.8580 floor.
EURAUD
The cross was bid higher as the massive profit taking over the past couple sessions came to an end. The move was comparative to the sell off seen in the EURUSD major, as central bank offers kept the major lower even into the close. Nonetheless, the pair continues to retrace past the 1.6650 figure and is likely to make an imminent test of the 1.6700 in the short term. In the euros favor, traders will be looking for higher confirmations of economic growth and inflation in prompting central bankers to continue their rate tightening cycle. For next week, although a considerable amount of focus will still be placed on US dollar based data, the market will wait for gross domestic and consumer price figures. With expectations of higher or sustained inflationary data, the Euro leg could see significant support ground. However, the crosss gains may be limited dependant on the gross domestic product figure.
Finding a bottom in the session, the EURAUD looks to have established considerable bidding at the 1.6625 figure, coinciding with the July 18th low. Heading into the Asian session, 1.6683 seems to have emerging selling pressures, capping the days gains as offers are likely being taken. Should price action see a way around the figure, 1.6740 (38.2 percent fib from the 7/4-7/26 bear wave), bulls will likely make a run for 1.6800.
USDCHF
Dollar data was somewhat positive on the day as the overall trade balance narrowed slightly for the month. The figure was even revised higher against last months, making the actual figure seem positive enough. However, the data was overshadowed by UK terror plots in the morning, shifting assets back, even more so, in to dollar denominations as a risk aversion tactic. Now heading into the close, traders will focus on tomorrows retails sales figures. Although minimal in effect, the report should bolster the dollar a bit heading into the weekend as the survey is expected to reverse nasty negatives of the previous month. For the month of June, sales actually dipped 0.1 percent. The core is expected to increase by 0.5 percent as the headline is estimated to have jumped 0.8 percent in July.
Profit taking has the currency pair tilting slightly lower on the 60-minute perspective as we head into the Asian session. The decline coincides with emerging selling at 1.2385, a technical topside trendline as options selling may press the pair to test lower at the 1.2250 figure in the overnight, only time will tell. Should the 1.2300 figure fail to support, the aforementioned will likely occur. However, with bid re-emergence at the 1.2300, traders will be looking for a double top test of the session high.
