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FOREX – Australian Dollar Market Summary
- Dollar remained largely unchanged as it is Payrolls showdown time again and while the outcome is not expected to be as robust as the previous month still a healthy result of around 175K is expected. A poor number could lead to broad based profit taking by the market which is overtly long on the Dollar. Earlier, data was positive as Factory orders increased in line with expectations while Productivity & Labour costs rose indicating inflationary pressures.
- Euro finally stabilized and inched a bit higher on position squaring after its intense battering over the last 3 days. The ECB kept rates on hold as expected and have so far chose to ignore the growing calls for a rate cut in the zone. Data is expected to remain weak today with a slump in Retail Sales seen. Any possible rally emanating from a poor payrolls outcome for the Euro is not expected to continue through next week.
- Yen for now is locked between strong offers for the Greenback above 108.75 and decent sized bids below 107.55. Earlier the monetary base report came largely in line with expectations but deflationary conditions continue to loom around. Liquidity has fallen below the target as Bank lending fails to pick up in spite of
Japan U.S.
- Pound went through volatile moves but was within its recent range as bottom pickers continue to keep it above 1.81 while resistance continues in the 1.8225-50 zone. House prices came in higher than expected this coupled with other recent data suggests a degree of stabilization in prices for now but overall trend remains weak. Construction PMI went to its lowest level in more than 3 years with all sub indices slipping.
- Australian Dollar has rallied back above 0.7550 but this morning’s house price data has come in lower than expected. Nonetheless it is deriving support from the unexpected halving in trade deficit and on commodity prices inching higher. Resistance continues around 0.76 with decent buying interest around 0.75.
FOREX Related Economic Data Released
|
GMT |
Release |
Region |
Previous |
Actual |
Comment |
|
|
May Nationwide House Prices |
|
0.9% |
0.3% |
Slightly higher than expecting as house prices have stabilized for now. |
|
|
June ECB Interest Rate Announcement |
Euro-Zone |
2.00% |
2.00% |
ECB has no intentions to raise rates this year and should remain on hold. |
|
|
April Factory Orders |
|
0.1% |
0.9% |
Increase in export orders has lead to factory orders inching higher. |
|
|
Q1 House Prices |
|
0.6% |
0.2% |
House price trend is from stable to decline. |
FOREX Related Upcoming Economic Release
|
GMT |
Release |
Region |
Previous |
Forecast |
Comment |
|
|
May CIPS Services PMI |
|
56.5 |
56.8 |
Services should remain largely unchanged but outlook is weak. |
|
|
May PMI Services |
Euro-Zone |
52.8 |
52.6 |
Keeping in line with the trend should decline slightly across the zone. |
|
|
April Retail Sales |
Euro-Zone |
0.3% |
-1.0% |
Sales have been sluggish across the zone and should decline. |
|
|
May Non Farm Payrolls |
|
274K |
190K |
Expected to stay around 200 K confirming robust employment scene. |
|
|
May ISM Non-Manufacturing |
|
61.7 |
60.0 |
Services sector should continue to be around steady levels. |
*Only key potential market moving data is mentioned, for a detailed Economic Calendar please click on the ‘Financial Calendar’ link on the web-site.
FOREX (Foreign Exchange) Technical Analysis
EUR/USD – Yesterday’s low was 1.2180 and high was 1.2296.
The pair closed at 1.2280.
The Dutch have followed the French and have rejected the EU constitution. It remains vulnerable for further losses with support in the 1.2185-1.2205 zone. A break below targets the strong support zone at 1.2095-1.2110. On the upside, short term oversold conditions might help it inch higher towards 1.2285 where mild resistance exists and strong offers on any break above 1.2355.
Key resistance is seen at 1.2295 followed by 1.2355 while support starts at 1.2195 followed by 1.2115.
USD/JPY – Yesterday’s low was 108.08 and high was 108.67.
The pair closed at 108.22.
The Yen has slipped but the Dollar has to clear strong offers lying in the 108.85-109.10 zone. The 109 region is a very crucial region and hold mixed technical interest with resistance around 109.45. On the downside Dollar bids lie around 108 with very strong bids around the 107.55 mark.
Key Resistance is seen at 108.55 followed by 109.15 while support starts at 107.55 followed by 106.95.
GBP/USD – Yesterday’s low was 1.8090 and high was 1.8206.
The pair closed at 1.8155.
The Pound’s fundamentals remain on the weak side and the pair is taking cue form Dollar’s general direction. On the upside resistance exists in the 1.8225-50 region with strong selling interest on any move above 1.83. Support lies in the 1.8110-25 zone with strong support around 1.8055.
Key Resistance is seen at 1.8225 followed by 1.8315 while support starts at 1.8110 followed by 1.8055.
AUD/USD – Yesterday’s low was 0.7485 and high was 0.7557.
The pair closed at 0.7542
The Australian Dollar has shot back above 0.7550 as commodity prices have rallied higher but for now mild resistance exists around 0.7575 with very strong resistance in the 0.7625-40 zone. On the downside support lies around the 0.7510 mark with decent buying interest in the 0.7460-75 zone.
Key Resistance is seen at 0.7595 followed by 0.7645 while support starts at 0.7510. followed by 0.7465.
Kunal Sharma
Forex Analyst
Easy Forex Pty Ltd. (
E-mail: kunal@easy-forex.com
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