Market Update – 16th July 2018 – Markets Advance, While Gold Declines As Risk Appetite Returns

U.S and European stocks, the AUD and commodities all moved higher Friday evening helping markets to finish on a positive note in an otherwise less than positive week for markets.

A closer look at AUD/USD and we are hovering around the 0.7400 handle after finding a bit of support in the 0.7300’s. The medium term trend for AUD/USD however remains pretty bearish with the currency pair off some 6 cents or 600 points since the beginning of February. Longer term (which I’m calling back to early 2016) we were in a cyclical uptrend however that appears to have ceased when we failed to hold 0.7600 in late April and then again in the middle of June. Where to for the Aussie from here is anyone’s guess but views range from 0.8000+ on the high side and 0.6500 on the low side. I prefer to think we will continue to hold a range between 0.7300 and 0.8000, with the AUD supported at 0.7300 by strong commodities prices and constrained at 0.8000 by rising U.S interest rates.

Trump meets with Putin later this evening in Helsinki while his Trade War with China persists. I’m a generally optimistic fellow and hence think that we may have seen the first and only shot in the Trump/China trade war with common sense hopefully prevailing later this month. Should that happen we should see a nice bounce in commodities which should flow on to a higher AUD.

AUD EXCHANGE RATES:

AUD/USD – 0.7398

AUD/GBP – 0.5587

AUD/EUR – 0.6329

AUD/NZD – 1.0947

AUD/JPY – 83.17

USD/BTC – $6,333

OTHER MARKETS: 

All Ords (XAO) – 6,351

Gold – A$1,673/oz

Silver –  A$21.33/oz

WTI – US$69.77/barrel

DATA RELEASES TODAY:

CNY – GDP q/y at 12.00pm

USD – Retail Sales m/m at 10.30pm