16th February 2015 – Daily Currency Market Report.

The market in brief:

  • AUD closes at resistance
  • NZD just shy of February highs
  • European GDP beats expectations
  • Canadian Manufacturing strengthens
  • US Consumer Sentiment drops
  • S&P 500 closes at record high. DJIA 18,019.35
  • Gold at $1,227 & Crude Oil up 3% at $52.78

Market moving events for the next 24 hours:

  • NZ Retail Sales
  • Japanese GDP
  • Euro group meetings
  • US Public Holiday (Presidents Day)

AUD-USD: The Australian Dollar closed at the session highs as the economic situation in Europe appears to be improving, the Greek debt talks are progressing well, US equities strengthened and US data fell below expectations. The week ahead will start slow as the US is closed for President’s Day, however tomorrows RBA Monetary Policy Meeting minutes will be our highlight along with a sprinkling of US data later in the week. On the charts this pair really needs a strong break through medium term resistance that sits USD 1 cent away. Support is seen at last week’s lows 150 points below and therefore good targets for both importers and exporters to place orders at.

AUD-EUR: Despite the apparent ease in tensions between Greece and the EU on the debt talks and a better than expected read in the EU GDP figures, the Euro lost ground here as risk appetite saw the Australian Dollar strengthen. The austerity talks continue today and we expect a communique to come this evening; otherwise we have just German Economic Sentiment and Manufacturing data to come tomorrow and Friday respectively. Technically we still trade either side of the 50% retracement of the selloff seen since late September so a fair place to buy or sell the single currency. A break of that range will determine longer term direction, but that sits 3 cents either side so may take a while.

AUD-GBP: The Australian Dollar pulled away from the brief spike below the psychological 0.50 pence area seen on Thursday after the Bank of England played down the threat of deflation in its quarterly report. There was no UK data on Friday and is none until tomorrow’s inflation figures, which are expected to show a decline. Wednesday has unemployment numbers, average earnings and the voting of the 9 members of the monetary policy committee at their most recent meet. None of the above is expected to greatly shake price action; however Fridays Retail Sales may well do so. Technically we had a brief break below the downward trend line and with most indicators showing oversold levels favour a pull back to more comfortable levels. A healthy target for importers sits 2 pence above.

AUD-JPY: This pair traded a tight range for most of Friday’s session as we wait for today’s GDP figures and the Bank of Japan meeting and Monetary Policy Statement on Wednesday.

AUD-NZD: The Tasman cross continues to trade at these lower levels as the market is happy to buy into the Kiwi and its higher interest rates. Retail Sales are due this morning and the Global Dairy Trade price on Wednesday. Both will play a large part in determining where this pair is headed in the short to medium term. Technical support is previous all-time lows that sit just 70 points below.

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