AUD/USD: 0.7440EUR/USD: 1.1000The US employment figures showed strong Non-Farm jobs growth of +242K, but at the same time, some benign inflationary pressures and saw the US$ come under some pressure on Friday, allowing commodities to rally with stock markets following close behind. It is a busy week ahead, with Interest Rate Meetings due at the ECB, BOC and RBNZ. An easing from the ECB seems to be on the cards while the BOC/RBNZ appear set to remain on hold. There is a fair bit of data to from China, including the Trade Balance, CPI, Retail Sales, Industrial Production and Urban Investment. Today kicks off with the German Factory Orders and EU Sentix Investor Confidence Survey, while from the US the Fed’s Fischer will be speaking. Ahead of that, Australia sees the AIG Performance of Construction Index and ANZ Job Ads, while from Japan comes the Provisional Leading Economic Index and the Coincident Index.
AUDUSD had a strong session on Friday, reaching 7 month highs after the release of the US data, to finish the week just below the peak of 0.7442.
This week will be a little less hectic than last week in terms of domestic data but will still offer some good trading opportunities, beginning today with the AIG Performance of Construction Index, ANZ Job Ads. The NAB Business Conditions/Confidence and the WBC Consumer Confidence are also up this week and there will be plenty to come from China as well. Tomorrow will see the February Trade Balance, with expectations of a $50.75 bio surplus (vs $63.29 bio last month) while exports are expected to fall by -15% and imports are expected to fall by -10.2%. Thursday gets the CPI and then, on Saturday, the China Retail Sales, Industrial Production, Urban Investment are all due.
The shorter term charts are now reaching overbought levels so some caution is required on the topside but the daily indicators still look constructive and the weeklies are looking increasingly so as well. Having briefly overcome the 11 August 2015 high of 0.7439, once back above Friday’s high would run into further offers, nearby at the major Fibo level at 0.7450 (23.6% of 0.9504/0.6826) beyond which we could see an approach towards 0.7493 (50% pivot of 0.8162/0.6826). A break of 0.7500, which would make the RBA feel very uncomfortable, would target 0.7532 (2 April 2015 low) and then the May/June 2015 double bottom lows at 0.7597. Beyond there lies the next Fibo resistance at 0.7648 (61.8% of 0.8162/0.6826) but is currently a long way off. Expect an increase in the negative rhetoric from the RBA in order to interrupt further gains.
A failure here would return towards support, likely to be seen at 0.7400 and then again at the minor Fibo level at 0.7360 (23.6% of 0.7110/0.7442). Below here looks unlikely early in the week, but if wrong further losses would target 0.7335 (minor) and then 0.7315 (38.2%) and 0.7300.
Economic data highlights will include:
M: AIG Performance of Construction Index, ANZ Job Ads
T: NAB Business Conditions/Confidence, China Trade Balance
W: WBC Consumer Confidence, Investment Lending for Homes, Home Loans
T: Consumer Inflation Expectation, China CPI, PPI
F:
S: China Retail Sales, Industrial Production, Urban Investment .
Jim LanglandsFX Charts
