Analys från DailyFX
AUD/USD Rejected at Interim Resistance as August Jobs Data Disappoints
Talking Points
– RBNZ strikes hawkish tone and jumpstarts Kiwi rally.
– Reports of insignificant efforts to pad the Japanese economy from a sales tax hike – rumored ¥5T – suggested that BoJ easing is waning.
– Australian Dollar knocked back on grim reality of weakening economy.
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INTRADAY PERFORMANCE UPDATE: 10:50 GMT
Dow Jones FXCM Dollar Index (Ticker: USDOLLAR): +0.10% (-1.05% prior 5-days)
ASIA/EUROPE FOREX NEWS WRAP
Usually bound together by their geographical proximity and central banks’ policies, the Australian and New Zealand Dollars are diverging quite dramatically as it appears policy may be diverging once more. Ahead of the Asian session on Thursday, the Reserve Bank of New Zealand struck a hawkish tone at its policy meeting, propelling the New Zealand Dollar to fresh monthly highs against the US Dollar.
The Australian Dollar’s fate overnight was not as kind. After the Aussie had rallied consistently throughout the week following Tony Abbott’s rise to Australian Prime Minister, the August jobs data underscored how tough a job it will be for the new government to achieve its goal of reinvigorating economy.
The Australian economy lost -10.8K jobs versus a gain of +10.0K expected, with the Unemployment Rate ticking up to 5.8%, the highest rate since August 2009. The Australian 10Y note yield dropped sharply, now at 4.040%; all of the gains in yield over the past week were lost.
From here, the Aussie’s fate is tricky. Credit Suisse Overnight Index Swaps barely budged on the jobs data, with only an 8% chance of a 25-bps rate cut at the next policy meeting. While that is softer than the beginning of the month – 0% – it settled tighter than the intraday low of 10%. Over the next few days, traders look to see which takes trend develops – technical resiliency or fundamental retracement. See the chart below for greater explanation.
AUDUSD 5-minute Chart: September 12, 2013 Intraday
Taking a look at European credit, slightly lower yields across the region – but for Portugal – have undercut the Euro on Thursday marginally. The Italian 2-year note yield has decreased to 2.034% (-0.1-bps) while the Spanish 2-year note yield has decreased to 1.675% (-0.5-bps). Likewise, the Italian 10-year note yield has increased to 4.529% (+0.3-bps) while the Spanish 10-year note yield has decreased to 4.450% (-2.6-bps); lower yields imply higher prices.
Read more: Aussie Firms on Election Outcome – Rally Unjustified Given Economic Pitfalls
ECONOMIC CALENDAR – UPCOMING NORTH AMERICAN SESSION
See the DailyFX Economic Calendar for a full list, timetable, and consensus forecasts for upcoming economic indicators. Want the forecasts to appear right on your charts? Download the DailyFX News App.
TECHNICAL ANALYSIS – CHART OF THE DAY
– The June 11 swing low at $0.9325 proved to be staunch resistance amid the jobs data, having previously contained advances on June 26-27, July 11, and July 23-24.
– For now, the September 5 and 6 lows set above the daily 55-EMA at 0.9115 is the critical line in the sand for bulls.
– A break below 0.9115 would expose yearly lows below 0.8900.
– Conversely, the bull scenario with a weekly close above 0.9325 would suggest a greater rally into 0.9665.
— Written by Christopher Vecchio, Currency Analyst
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
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What’s inside:
- EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
- Resistance in vicinity of 11825/80 likely to keep a lid on further strength
- Targeting the low to mid-11600s with more selling
Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.
Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.
Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.
Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).
Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.
For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.
EURUSD: Daily
—Written by Paul Robinson, Market Analyst
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You can follow Paul on Twitter at@PaulRobinonFX.
Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
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