The market in brief:
- AUD pushes higher
- NZD down
- NZ employment fails to deliver the expected pick up
- Australian Retails Sales disappoint
- UK Services increase
- EU Retail Sales fall
- US ADP Jobs data weaker than forecast
- US Fed Chairwoman warns on overheating stocks
- Gold up $24 to $1,202 & Brent Crude at $65
Market moving events due:
- Australian Unemployment
- US Weekly Unemployment Claims
AUD-USD: The Australian Dollar pushed higher still and completely ignored the weaker than expected local retail sales figures. The market continues to price in an end to interest rate cuts here and with a poor US ADP jobs number overnight the chances are that tomorrows all important US Non-Farm Payrolls will also disappoint. Data today sees our unemployment numbers released, which some think could see the unemployment rate tick back up to 6.2%. This and a market waiting for the US data should result in a limited top side and perhaps a steady correction towards support that sits 70 points below. Any upside surprise targets previous highs USD 1 cent above.
AUD-EUR: The Euro is going from strength to strength and outweighing any gains seen by the Australian Dollar. EU Retail Sales dropped for the first time in 6 months; however the new found optimism over a Greek debt deal and weaker US jobs numbers now has this pair back at Mondays opening lows. There is no major data from mainland Europe this evening and with a French bank holiday tomorrow, we’d expect the week long range to hold.
AUDGBP: The tight range that this pair has been held in is starting to break, however better than expected UK Services numbers along with a weaker domestic Retail Sales print and of course this evenings UK elections has meant the explosive move we are expecting has yet to materialise. The polls suggest the ruling coalition should just hold on to power, but with a few spoiler votes going the way of UKIP and the SNP. Technically the daily chart suggests exhaustion of the up move already, but we should see a more concerted move higher once the election is over.
AUD-NZD: The Tasman Cross added another 150 points to the upside yesterday as the markets continue pricing in a change to both central banks interest rate policies and as NZ unemployment stayed at 5.8%. There is no NZ data for the rest of the week so short term direction will be determined by Australian and Chinese events. On the charts support for any brief correction sits NZD 1 cent below, but we favour an eventual run higher to initial resistance 150 points above (resistance since Dec’14) and then to the triple top that formed in Q3’14 that is NZD 6 cents above.
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