28th March 2017 – Weekly Currency Market Report



The Market in Brief:

                                                              • AUD down against the majors.
                                                              • GBP CPI y/y 2.3% V expected 2.1%.
                                                              • NZD RBNZ leaves cash rate at 1.75% as expected
                                                              • USD Weekly Unemployment Claims 261k V expected 241k and Core Durable Goods 0.4% V expected 0.5%.

Market Events Due:

                                                          • EUR  German Ifo Business Climate 
                                                          • USD CB Consumer Confidence (Wed) Final GDP q/q and Weekly Unemployment Claims (Thur)
                                                          • GBP Current Account (Fri)
                                                          • CAD BOC Gov Polz speaks (Wed) GDP m/m (Fri)

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AUD/USD: Finished the week down almost 1.75% from its Tuesday high which was a fresh 4 month high, last seen just before Trump was elected. The previous week the US Fed raised interest rates to 1.00% and said another 2 hikes are coming this year. The move disappointed some in the market as there were murmurs of a 0.50% hike and/or an expected promise of 3 further moves by the FOMC. This saw AUD push higher but the tide turned quickly on Tuesday. Importers can target 100 points higher where the resistance has held in place since for the last 2 years. Exporters have their best opportunity in 8 days and can target short term support 70 points lower.

AUD/EUR: Finished the week down 1.6% to close at short term support that has held here for the last 3 weeks and further back to the end of January. This is a reasonable line in the sand as this level held as resistance back to October last year before it finally broke to the upside. Importers with time on their side can target the fresh 44 month high 4 weeks ago but this may be a stretch given the last weeks fall. 

AUD/GBP: Had a solid correction lower, closing the week down 2.5% from Monday’s high. The fresh 4 month high on 16/03/17 was short lived with AUDGBP hitting a fresh 6 week low on Thursday. This gives those looking to sell GBP their best opportunity in 6 weeks. The previous week the Bk of England’s policy group voted for an interest rate hike and that was supported by comments from other members too. Could the Pound be finally turning the corner?

AUD/NZD: Closed the week down 1.25% from it’s high after previously having 4 consecutive up weeks. The currency got within 30 points of our 1.1000 target. Exporters can target short term support 80 points lower while importers with time on their side can target the 11 month high 150 points above.

AUD/JPY: Of the majors AUD had its largest fall against the JPY, down 3.3% to be at its lowest level this year, representing a great opportunity for exporters. It was only 6 weeks ago that AUDJPY was at a fresh 1 year high. Importers can target short term resistance 100 points higher with last Monday’s high 300 points above looking out of reach in the short term.

AUD/CHF: Closed the week down 2.2% from it highs. Similar to the EUR there is short term support here as this level held as resistance for quite a long time. The 22 month high that AUD hit 5 weeks ago looks a long way off. Importers with time on their side can wait but may need to target lower levels on a rally.

Compass Global Markets Team.



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