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EUR/USD Melt-Up Continues Through 1.39, AUD/USD Back to Neckline

Christopher Vecchio

Talking Points:

- AUDUSD right back to neckline - don't discount a rally.

- EURAUD takes a step back, but EURUSD continues its push higher.

- US economic data takes center stage this morning - Retail Sales.

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The Australian Dollar is seeing a sharp reversal across the board after much better than expected labor market data, and it appears that lagging indicators - inflation and employment growth - are catching up to positive signs elsewhere. If anything, this data secures the RBA's neutral stance for the time being; the ongoing process of the economy rebalancing will keep the RBA from tightening rates until early-2015 at the soonest.

The Euro on the other hand hasn't gotten a spark for its move higher but instead continues to take the path of least resistance - now that it has broken back above the July-November 2013 rising TL and through the 2008-2011 descending TL against the US Dollar. We're watching the US Advance Retail Sales report today for fundamental cues.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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