FOREX Trading Australia – Foreign Exchange Market Summary
Dollar
· Dollar slipped across the board on a day devoid of any major data releases which usually means the market turning their attention back to
Euro
· The Euro broke through key resistance levels going towards 1.3350 as it continues to be supported by default as not many are willing to support the Dollar ahead of the Trade Balance figures on Friday. It was also boosted by comments from ECB’s Wellink who stated that they might eventually have to increase rates. His comments were more general as for now inflation remains well contained and a rate hike is not likely in the short to mid term horizon.
Yen
· The Yen was helped by broad Dollar weakness and a rise in household spending, going back towards 104.50 but the spike in oil prices is keeping it under pressure on its crosses. Especially since unlike last year’s spike, this time the Japanese economy’s direction is uncertain. The Euro is heading towards 140 against the Yen but with good data expected from
Pound
· The Pound rallied by around 200 points as the market shrugged off the poor Retail Sales data. The market is betting on the BoE increasing rates in the near to mid horizon but a lot of that assertion is speculative and any signs that prove otherwise, would hit the Pound hard. For now, a pullback is likely towards 1.92 with resistance around 1.9355 as cue is taken from the manufacturing data.
Australian Dollar
· The Aussie finally broke decisively above 0.7950 and continues its relentless pursuit of the 0.80 target. Broad Dollar weakness, High commodity prices and the prospect of another rate hike in the near term is providing solid support for the Aussie. A good outcome in tomorrow’s employment figures could help it break above 0.80.
Economic Data Released
|
GMT |
Release |
Region |
Previous |
Actual |
Outcome |
|
|
|
January Household |
|
-3.5% |
0.5% |
First rise in 5 months but overall spending remains low. |
|
Upcoming Economic Releases
|
GMT |
Release |
Region |
Previous |
Forecast |
Expectation |
|
|
January Leading Economic Index |
|
45.5% |
55.0% |
After last period’s fall index should prop back above 50. |
|
|
January Industrial Production |
|
0.5% |
0.0% |
Orders remain mixed as does domestic demand with a decline estimated |
|
|
January Industrial |
|
0.9% |
0.6% |
Like the |
|
|
RBNZ Rate Decision |
|
6.5% |
6.5% |
Should remain on hold with a 10% chance of an increase. |
FOREX Technical Analysis
EUR/USD – Yesterday’s low was 1.3207 and high was 1.3361.
The pair closed at 1.3346.
It has finally managed to break decisively over 1.33 with mild resistance around 1.3375 and a stronger one around 1.3425. Negative factors around the Dollar are helping it remain supported above 1.32. The market seems happy to buy on dips on expectations of a slow and gradual inch higher in the Euro.
Key resistance is seen at 1.3375 followed by 1.3455 while support starts at 1.3250 followed by 1.3155.
USD/JPY – Yesterday’s low was 104.34 and high was 105.16.
The pair closed at 104.57
Weak data from both sides is keeping the pair range bound between 104-105.50 but if Japanese data turns out to be strong as expected, then Dollar bids around 104 would come under pressure. A decisive break below could accelerate Yen’s gains towards 103.
Key Resistance is seen at 105.15 followed by 105.65 while support starts at 103.95 followed by 103.25.
GBP/USD – Yesterday’s low was 1.9129 and high was 1.9325.
The pair closed at 1.9280.
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 remain 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 1.9345 followed by 1.9395 while support starts at 1.9205 followed by 1.9115.
Australian Dollar
AUD/USD – Yesterday’s low was 0.7921 and high was 0.7987.
The pair closed at 0.7976.
It is very close to breaking above 0.80 but minor pullbacks towards 0.7925-50 are likely but strong support and buying interest exists around 0.79. The market is eyeing employment data with a good result likely to help it break above 0.80.
Key Resistance is seen at 0.7995 followed by 0.8045 while support starts at 0.7925 followed by 0.7855.
Kunal ‘Kris’ Sharma
Forex Analyst
Australian Financial Services License 246566
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