FOREX Trading Australia – Foreign Exchange Market Summary
Dollar
- Dollar continued to slip on a day devoid of any major
U.S.
Euro
- The Euro surged past 1.34 before stabilizing around 1.3375 as it remains supported on the back of deterioration in the sentiment around the Dollar. German Industrial Production outcome was well above expectations but the rise is more due to seasonal factors with domestic demand expected to remain mixed. For now, the market is looking to buy on dips down to 1.3290-1.3320.
Yen
- The Yen rallied across the board helped by better than estimated data outcome and expectations of good data for the rest of the week. Leading Economic Index came above 50% for the first time in five months; any reading above that mark suggests economic expansion. While high oil prices remain a concern the economy is most certainly set to perform better than it did last year. It has gone back into the 104 region after encountering strong Dollar bids in the 103.50-75 zone with further data eyed from both sides to push the pair in a decisive direction.
Pound
- The Pound slipped back towards 1.92 as the Industrial production data came below expectations and the Trade deficit increased further. The result caught
Sterling bulls on the wrong side and came as a reality check; this would also diminish hopes of a rate hike in today’s BoE meeting. But as long Dollar weakness remain intact the Pound has good support above 1.9150 and strong buying interest above 1.9075.
Australian Dollar
- The Australian dollar got a boost this morning by better than expected Employment figures, unemployment rate did not increase while jobs added increased by 20 K. It is around 0.7950 with strong buying interest on any dips towards 0.79. The New Zealand Dollar again broke above 0.74 as the Reserve Bank unexpectedly raised rates by 25 bps but Finance Minister Cullen is very concerned about the high Kiwi and the official rhetoric is bound to increase if it stays above 0.74.
Economic Data Released
|
GMT |
Release |
Region |
Previous |
Actual |
Outcome |
|
|
|
January Leading Economic Index |
|
45.5% |
55.0% |
Has increased, suggests economy is on the path of steady growth. |
|
|
|
January Industrial Production |
|
0.5% |
-0.2% |
It has declined as export orders remain weak |
|
|
|
January Industrial |
|
0.9% |
3.1% |
Much higher than expected but could be a one off outcome. |
|
|
|
RBNZ Rate Decision |
|
6.5% |
6.75% |
Unexpected outcome but in line with reality of rise in inflationary pressures. |
|
Upcoming Economic Releases
|
GMT |
Release |
Region |
Previous |
Forecast |
Expectation |
|
|
January Machine |
|
-8.8% |
2.5% |
Orders should increase after a cyclical decline over last few months. |
|
|
January Industrial Production |
|
0.7% |
0.0% |
Orders remain subdued but like |
|
|
BoE Rate Decision |
|
4.75% |
4.75% |
Should remain unchanged as conditions do not warrant a rise |
|
|
January Wholesale Inventories |
|
0.4% |
0.6% |
Inventories to remain on steady growth levels. |
FOREX Technical Analysis
EUR/USD – Yesterday’s low was 1.3330 and high was 1.3422.
The pair closed at 1.3374.
It broke above 1.34 with resistance around 1.3425, for now the market is looking to buy on dips down to 1.3350 and strong buying interest on any move down towards 1.3275. On the upside a break above 1.3425 could lead to a rally towards 1.3475-90 where the pair could witness some pullback on profit taking.
Key resistance is seen at 1.3425 followed by 1.3485 while support starts at 1.3340 followed by 1.3255.
USD/JPY – Yesterday’s low was 103.64 and high was 104.75.
The pair closed at 104.01
The pair managed to back into the 103 region on the back of strong Japanese data, decent Dollar bids exists in the 103.50-75 zone with a break below bring the 102.90 into focus which could see some Dollar buying. On the upside any Dollar foray above 104.75 should see selling interest with today’s Japanese data to provide further clues.
Key Resistance is seen at 104.75 followed by 105.25 while support starts at 103.55 followed by 102.90.
GBP/USD – Yesterday’s low was 1.9199 and high was 1.9318.
The pair closed at 1.9221.
It has managed to gain on Dollar’s weakness with mild resistance around 1.9310 and a stronger one in the 1.9355-70 zone. As long as sentiment remains poor for the Dollar, the Pound remains supported on dips towards 1.92 and very strong support above 1.91.
Key Resistance is seen at 1.9295 followed by 1.9355 while support starts at 1.9175 followed by 1.9115.
Australian Dollar
AUD/USD – Yesterday’s low was 0.7908 and high was 0.7980.
The pair closed at 0.7918.
It is very close to breaking above 0.80 but minor pullbacks towards 0.7900-20 are likely but strong support and buying interest exists around 0.79. Employment data came above expectations with the Aussie continuing to target 0.80.
Key Resistance is seen at 0.7985 followed by 0.8025 while support starts at 0.7915 followed by 0.7855.
Kunal ‘Kris’ Sharma
Forex Analyst
Australian Financial Services License 246566
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