It has been a wild ride on all fronts today, kick started by the BOJ’s Kuroda, whose remarks on the Yen surprised the market, and has flowed though into some exaggerated moves in all the other currency pairs. With the RBNZ cutting rates this morning, causing an 150 point gap down in the Kiwi, the volatility looks set to continue, with the Australian jobs data due later this morning, coming ahead of the China New Loans, Urban Investment, Industrial Production and Retail Sales. Later in the day, the US Retail Sales will be released, and with the market expecting a stronger result than has recently been the case the focus will again turn to the timing of a Fed rate hike. Greece – as always – will lurk in the background. Be nimble!
It was a big day for the Aud, falling to 0.7645 after Glen Stevens had attempted to talk it lower, only to be sharply reversed following Kuroda’s comments on the Yen, causing general US$ weakness which saw the Aud reverse sharply higher, triggering stops above 0.7700 and spiking to 0.7785. Since then the Aud has chopped around near 0.7750 and now awaits another busy session, headed by the local unemployment (exp 6.2%, +11K) and a raft of China data.
Technically, a decent reading from the jobs data could see another run to the 0.7785 high and on to 0.7800 and the 3 June high at 0.7818, beyond which will see sellers at the Fibo pivots at 0.7845 and 0.7880.
If the Employment/China data fails to impress then the downside will see a return towards 0.7725 and then to 0.7700, below which would see a run back towards 0.7680/90 (100/200 HMA) and towards 0.7630.
These are not markets for the feint hearted so keep a nimble stance and once the local/China data is out of the way, then look for the US Retail Sales to provide the direction. A good number will alert the market to the chance of a near term Fed rate hike and would again see the Aud come under pressure. Too hard!
The RBNZ just cut rates. This caused a brief spike to 0.7695 before an equally quick return to the 0.7750 area leaving the technical outlook unchanged – and confused.
Economic data highlights will include:
Unemployment, China New Loans, Urban Investment, Industrial Production, Retail Sales.
Jim LanglandsFX Charts www.fxchartsdaily.com
