Trader Talk

What Happened on Friday > Top 3?

• USD made a comeback on positive Jobs data
• Oil back up to $50 and Gold tumbles after USD Bid higher
• December US rate hike still 45% after solid NFP data

Outlook

• Kiwi Inflation data in the Asian session today
• Thursday RBNZ rate announcement
• US Inflation data to end the week

Data & Event Risk Today?

• (NZD) Kiwi Quarterly Inflation data – 1pm Sydney
• (USD) FOMC Member Kashkari speaks– 3.25am Sydney

USDX: 93.30

Non-farm US jobs data saw a tick in all three boxes to help the USD on Friday.

Unemployment ticked back down to 4.3% and 209k new jobs added was enough positivity for the USD bulls to come back in and bid USDX back to 93.50.

Watch for US CPI data on Friday evening to sway the sentiment over the course of this month for USD.

USDJPY: 110.80

USDJPY 1 big figure higher on Friday in a knee-jerk move led my US 10-year yields after the stellar jobs report for July.

Can the USDJPY find a base above 111 or drift back?

With a lack of US data risk events until FOMC Member Neil Kashkari speaks late in the US session, a driftwood floating level around 110.75 is very likely today.

I would be cautious around getting long USDJPY from here but his rhetoric will be key if a move above 111 is to happen.

EURUSD: 1.1790

Euro came off under pressure as Friday’s jobs report was absorbed by the markets as dollar positive.

The EURUSD took a reset lower to 1.17320 before bouncing back sharply to head towards 1.1800 again.

Look for sellers to get back in above 1.1800 so a patient approach is best from here.

GBPUSD: 1.3055

Sterling totally fell out of bed late last week as the selling pressure saw Offers down from 1.3250 to 1.3030.

That was a sharp rest lower on the cable because markets had to re-price the BOE being far too dovish and highlighting the Brexit concerns that they have.

The BOE got what they wanted, which was to jawbone the Sterling level back down towards 1.3000.

The UK manufacturing production data hits the newswires this Thursday, so expect GBPUSD to drift back up to around 1.3080 before turning south again. Seems oversold actually so if you are a keen scalper there are opportunities here.

AUDUSD: 0.7940

The Aussie dollar moved sharply lower on the back of the NFP data release but has recovered some of those losses just as quickly to start this week.

There is not a great deal of AUD data & event risk on the calendar this week, but the AUDUSD looks like he wants to get back 7950 again today.

This Monday morning recovery shows the strength of the AUD bulls in the market.

NZDUSD: 0.7415

The NZD looks like the best opportunity today, particularly after the Quarterly inflation report is released.

The markets are looking for a reason to bring NZDUSD back from recent highs, but the Kiwi is being very resilient so far.

This is a complete wait & see trade after today’s inflation data.

USDCAD: 1.2535

USDCAD was a great pair to BUY after NFP as I called last week, being the most Oversold pair in the market amongst the majors.

We are seeing consolidation in USDCAD around 1.2630 to start the Asian session today, built looks like a move back to 1.2750 is very possible this week.

The Canadian data was a mixed bag on Friday night, but as always was overshadowed by the US Jobs data released simultaneously. Again, look to enter LONG, back to 1.2750.

VIX: 10.03

The VIX is still ominously low and well overdue for a move back to 11 or above.

Earnings season is in full swing fuelling US stocks to crazy high levels, but I still favour the SHORT trade for a risk off correction. A great test of trader’s patience.

GOLD: $1,258.70

Gold was Offered $10 lower on Friday but let’s not get to carried away.

The US Inflation data out on Friday will be the biggest catalyst for a number of big FX moves, but also for the next significant move in Gold.

Oil (WTI): $49.60

Oil traded higher to $50 once again n on Friday to close off last week very solidly.

The midweek US inventories data is always crucial for knee-jerk moves in WTI and I still favour a move back towards $44/446 levels this coming fortnight.

Macro Themes in Play

• USD Bid up on NFP data beating estimates
• Markets still pricing a 45% chance of December rate hike for the US.
• US Inflation is still the crucial piece of the puzzle for a real USD comeback this week