With a relative quiet week on the data front, price has been left to itself. Although last night’s UK jobs data gave the cable a 90pip spark which was a bit of fun. Also headlines on Syrian front has seen the US back down with embarrassment and I dare say once the dust settles Kerry will no longer be employed.
Onto the figures with RISK ON in earnest as stocks soar. With funds flowing to high yielding assets and out of safe havens we have seen the greenback, gold and oil all fall from grace. US bonds are off smalls, but reasonably steady as investors are still eyeing next week’s FOMC with the view of a small reduction of the bond spending. If and when Uncle Ben starts to turn the tap off bonds will rally and greenback rally harder as stocks slide. The cheap money Ben has provided has propped up the US stock market to higher highs and that trend will reverse. Until then though, grab your seat because next week you will want to be front row as the rollercoaster peaks.
DATA HIGHLIGHTS TODAY – NZ Monetary Policy Statement. AU Unemployment. UK Inflation Report. ECB Draghi speaks.
AUDUSD – Managed to get through resistance of 93 as funds flow out of the US dollar. The bullish business sentiment riding on the back of the Lib’s win is still behind the Aussie too. Today we do have jobs data and the forecast is +10.2K. Whilst I think we will have a positive figure I do not think it will be that high, I just don’t see the jobs being added in the lead up to the election, not full time employment at least and that is the figure I watch as it is more productive to the economy. If it is under the forecast expect a little sell off in the Aussie.
EURUSD – Again this is a US dollar weakness rather than any underlying strength from the Eurozone. No news is good news in the case of the Euro mess. Draghi chatting tonight but doubt that will move the market much. Still, a HH/HL and we seem to be heading back to resistance again.
GBPUSD – The Poms got their groove on and smashed through the large resistance of 1.5755 thanks to yet another great economic release overnight. It is getting a little overheated and I expect it to come and retest the, now, support level of 1.5755.
NZDUSD – No change to rates this morning so the Kiwi’s added 50pips to the value of their currency pushing through 81¢. Will be very interesting to see if it can maintain these levels and rotate higher to 83 or 84. Like the Cable it looks overheated though, and has also been at these prices 4 times in last 4 months to only trace down to 77.
USDCAD – Getting closer to the long term trend line near 10290 as the dollar sinks. The Loonie still benefiting from that and the great construction figures earlier in the week.
USDJPY – Is posting HH/HL’s but also failed to stay above 100. I have a couple of short yen positions but not against the greenback, not yet, next week maybe.
GOLD – Yet again, it tracked sideways in a tight 10 range above support level, as it decides if it wants to run higher again.
David Long / Proprietary Trading Manager