My target for AUD/USD was missed by the market but nevertheless a decent decline was noted. Unconfirmed speculations that the Chinese Securities Regulatory Commission (CSRC) will hold a press conference at 08:00am GMT with 'positive news.' This prevents the risk-aversion mode to completely engulf AUD pairs and crosses so weakness could resume after 08:00am GMT. If China doe surprise gains may reach the resistance at 1.0443. The price is expected to cap further gains, I would look for the downtrend to continue towards my predetermined target at 1.0295. To recap, there is a fair possibility the Reserve Bank of Australia (RBA) may cut its cash rate by 25bps in next week's monetary policy meeting.
EUR/USDEUR/USD recovery will be put to the test around 12:00pm GMT when Spain will announce its preliminary budget report for 2013. So far Spain retail sales for August continue to plummet, posting -2.1% y/y. This is the 26th consecutive month of falls in the Spanish retail sales. EUR/USD did not appreciate the decline and reacted by dropping to 1.2884 at the time of this writing. The big fish however is due Friday when Spain finally releases its stress test results for the banking sector.
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