27th October – Daily Currency Market Report

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The Market in Brief:

  • AUD held within “flag’
  • NZD edges higher
  • German Ifo beats expectations
  • US New Home Sales drop
  • Gold $1,163 & DJIA 17,616

Market Events Due:

  •  NZ Trade Balance
  • UK GDP
  • US Durable Goods
  • US Consumer Confidence 

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AUDUSD: With no fresh data the Australian Dollar ground higher off the lows as it held within our flag formation. There are no economic events due today, so we should hold firm with resistance and support just 30 points away. There is a chance of a break with the data that’s due in 24 hours, but we do not foresee a large move until we hear from the FOMC on Thursday morning. We’d suggest orders are placed before hand so as to take advantage of the ensuing volatility.

AUDEUR: As forecast, this pair did have a look higher still although the move was reversed with German business confidence that beat expectations. There is no major EU data set to come today so we should see these levels held and perhaps a test higher again as we wait for Australian inflation figures tomorrow morning. We see another 100 points of upside until initial resistance levels.

AUDGBP: Also pushed higher as the wider European sector suffers from a market not too convinced of a recovery near to medium term. UK GDP data is due this evening and should remain in positive territory, therefore capping any sizeable gains here. As per yesterday’s report, technically the near term upward corrective channel is still in play so may give GBP buyers another opportunity before the major downward trend continues.

AUDNZD: The Tasman Cross did edge higher during our session, until the northern hemisphere sold into the strength for a flat end to the session. Today’s NZ Trade Balance will be of interest and is expected to show signs of improvement so therefore should keep a lid on further gains for today. Tomorrows Australian CPI and Thursdays RBNZ meet will be the main movers for this pair.

QUOTE OF THE DAY: Be brave. Take risks. Nothing can substitute experience. Paulo Coelho

ALTERNATIVE CURRENCY HEDGING: Ask us about a great alternative to traditional forward contracts that give the ability to cover at attractive levels, but with the flexibility to walk away should the spot rate improve or the contract not be required. 

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Jim Devonport

Corporate & HNW Client Manager 

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