Analys från DailyFX
Aussie Rebounds on Stronger Chinese Trade Data
INTRADAY PERFORMANCE UPDATE: 09:40 GMT
Dow Jones FXCM Dollar Index (Ticker: USDOLLAR): -0.24% (+0.66%prior 5-days)
ASIA/EUROPE FOREX NEWS WRAP
It is no secret that the Australian Dollar has been picked on in recent months by its major FX counterparts. Since April 11 (2Q’13 high for AUDUSD), the Australian Dollar has lost: -21.24% to the Japanese Yen; -19.29% to the Euro; and -17.17% to the US Dollar. Thus, today’s breakout performance across the board – no other major is close to performing as well as the Aussie – has stirred hopes of a “bottom” forming.
If there is a near-term pause in Aussie selling, given the strong bearish technical momentum behind AUD-based pairs, several strong fundamental catalysts are required to help carve out any bottoming on the charts. The Reserve Bank of Australia on Tuesday may have provided the initial spark, as the impact of the 25-bps rate cut was largely priced in; and therefore the less than dovish guidance proved to be a bullish catalyst.
AUDUSD 1-min Chart: Thursday, August 08, 2013 Intraday
Certainly, it wasn’t the July Australian jobs report that is fueling optimism: the Australian economy lost -10.2K jobs versus +5.0K expected; and the hold in the Unemployment Rate at 5.7% can be accredited to the -0.2% dip in the Participation Rate to 65.1% (not the sign of a strong labor market – an issue that the US economy faces right now).
Instead, it is Chinese data that is helping spur optimism, with the July trade figures showing both Imports and Exports expanded by more than expected last month. If short-term measures to help the country’s credit crunch are indeed working, then concerns over diminished Chinese growth could abate, providing the groundwork for a stronger Aussie in August.
The next such opportunity to see if the Aussie’s gains will continue comes tonight when the last of the Top 5 Events arrives: the July Chinese Consumer Price Index, often viewed as a strong proxy for Chinese growth.
Read more: Is the Australian Dollar on the Verge of a Major Recovery?
ECONOMIC CALENDAR – UPCOMING NORTH AMERICAN SESSION
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TECHNICAL ANALYSIS – CHART OF THE DAY
AUDUSD – The recovery from the lowest levels seen since September 2010 has been modest thus far, especially in context of the broader decline from mid-April. The descending channel that has guided the pair since late-June remains in place; and the gathering conflux of resistance above $0.9200 (several key Fibs relating to rally from 2008 low to 2011 high; 2010 low to 2011 high; and 2013 high/low. With the US Dollar reeling, further gains should be anticipated; although given the broader decline, only a weekly close above 0.9300 would given technical credence to a bottom having been established.
— Written by Christopher Vecchio, Currency Analyst
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
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
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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
You can receive Paul’s analysis directly via email bysigning up here.
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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