28th July – Daily Currency Market Report

The market in brief:

  • AUD flat
  • NZD edges higher
  • German Business Sentiment improves
  • US Durable Goods stronger
  • Shanghai stocks fall 8.5% again
  • Gold at $1,094 & DJIA 17,486

Market moving events due:

  • UK GDP

AUDUSD: The Australian Dollar attempted a push higher overnight, however with no supporting domestic data and Chinese stock markets having their biggest 1 day drop since 2007, the local unit was unable to hold those gains. We open flat and with no data of note due until tonight’s US Consumer Confidence, we’ll keep an eye on the equity markets up north as well as the technical picture. To the charts then and we notice an interesting sign of exhaustion on the candlesticks, as we head to yesterdays discussed long term support, with the other major technicals showing signs of being oversold. Exporters or those buying Australian Dollars may want to look at these levels short term.

AUDEUR: The common currency continued its push lower overnight as it benefited from broad based US Dollar weakness, German business sentiment is on the up and as the market is preparing for the FOMC on Thursday morning. Interestingly the IMF has claimed that the Greek debt is unsustainable and beggars the question why they gave them money. There is no economic data of note to be released at all today, so as with most pairs the technicals will hold sway. Here we are just shy of the lows that held in mid-December and so we’ll expect that to be touched and then perhaps see a correction higher before another push lower still. Buyers and sellers should have their orders in.

AUDGBP: Sterling has also started the week strengthening against the Australian Dollar, as forecast yesterday, and deeper into levels last seen in Q1’09. Our focus turns to tonight’s GDP release that economists foresee increasing for the 10th quarter in a row. The downward trend is therefore set to continue as we head to our 0.4545 / 2.20 targets.

AUDNZD: The Tasman Cross has pushed lower and severely testing medium term support. The Chinese slowdown is outweighing the poor NZ Trade Balance numbers and may well force us to rethink our upward trend forecast should the “SSE” not stabilize soon. There is a speech by RBNZ Governor Wheeler tomorrow morning, which should give us a clearer picture of the size and timing of interest rate cuts going forward, therefore holding us around these levels if not higher. The longer term picture should become clearer by the end of the week.

Quote of the day: Impossible is a word only to be found in the dictionary of fools. Napoleon Bonaparte 

 

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