Mar 11, 2010

Forex Crunch AUD/USD Strong After Job Figures

Forex Crunch AUD/USD Strong After Job Figures

AUD/USD Strong After Job Figures

Posted: 11 Mar 2010 04:15 AM PST


Despite unexciting job figures from Australia, the Aussie held the higher range it broke to earlier this week. The strength continues. Here’s an update on AUD/USD.

Only 200 jobs were gained in Australia in the month of February. This fell short of expectations that stood on 15,700 jobs. Australia’s Unemployment Rate remained unchanged at 5.3%, exactly as expected.

Aussie traders got used to positive surprises: in the past four months – the gain in jobs exceeded expectations each time, and the unemployment rate never disappointed and was usually better than expected. So this breather is a relative disappointment.

AUD/USD Reacion

The initial reaction was a lower Aussie: AUD/USD dropped towards 0.91, just above the 0.9090 support line. Earlier this week, AUD/USD finally broke above 0.9090, a long standing resistance line.

The strength of the Aussie kept it from falling back down. The recovery was quick, and withing hours, AUD/USD returned to 0.9160, close to the 0.9170 resistance line. The Aussie breached this line for a short while yesterday reaching 0.9193, but this happened for a vey short time.

If AUD/USD provides a convincing breach of this level, 0.9170, the next hurdle is a big one – 0.9327. This line sent the Aussie down many times in the past, and is a very strong resistance line.

Looking down below 0.9090, the important line is 0.8850. Only risk aversive trading can send the Aussie back down there. The trend is optimistic at the moment, so the high yielding, “risky” currencies such as the Aussie have room for more gains.

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Forex Daily Outlook – March 11th 2010

Posted: 10 Mar 2010 02:00 PM PST


The calendar is crowded today with major releases: Australian jobs, a rate decision in Switzerland and important figures in the US are the highlights today. Let’s see what’s up.

As seen in the Non-Farm Payrolls and also beforehand, the commodity currencies continue to show strength while the Euro and the Pound are weak. This will probably continue, although the Euro seems to be stabilizing.

After making a move upwards, Australia provides a strong start for the day. MI Inflation Expectations provide a warm up hinting about inflation. The main course is the employment data: Australia’s Employment Change is expected to show a gain of 15.3K jobs and the Unemployment Rate is expected to remain stable at 5.3%.

Note that these figures were better than expected for four straight months. The expectations were modest, like this time, and the result was better. Will it happen again? For the Aussie’s technical levels, check out the AUD/USD forecast.

In Europe, France begins the day with the release of the final Non-Farm Payrolls for Q4. The drop of 0.4% is expected to be confirmed. Later in Europe, the ECB Monthly Bulletin will provide an indicator about the whole region.

The Euro’s technical situation is stabilizing. Will it rise? Check out more on the Euro in the EUR/USD forecast, and in Casey Stubbs’ latest analysis.

British Consumer Inflation Expectations are expected to rise, as the inflation rises in Britain. The Pound is sliding down once again, after another credit warning from Fitch.

The Pound’s greater limits remain 1.4770 and 1.5350. It sticks to this range at the moment. Read more in the GBP/USD forecast.

In Switzerland, the central bank will announce a new interest rate. The SNB will probably leave the Libor Rate unchanged at 0.25%. The wording of the SNB Monetary Policy Assessment will shake the Swissy for sure. What’s never sure is the actions of the bank. At the same time last year, they intervened immediately after the rate decision. While these interventions are short-lived, they can throw traders out of their positions.

Moving to North America, Canada’s Trade Balance is expected to shift from a deficit to a surplus of 0.4 billion. The American Trade Balance will be released at the same time and will probably show the same deficit as last month – 40.2 billion.

At the same time, 13:30 GMT, American Unemployment Claims are released. They’re expected to drop from 469K to 453K, still within the same range as in recent weeks. This is the first jobless claims release after the NFP, and it will probably move the markets.

Canadian events aren’t over: the NHPI (New Housing Price Index) is predicted to rise by 0.5%, similar to the previous month. Later in Canada, BOC governor Mark Carney will make a public appearance and can also move the loonie.

USD/CAD is struggling to break below 1.02. This 2009 low is a tough and critical spot. For more on the Canadian dollar, read the USD/CAD forecast.

In New Zealand, the day after the rate decision brings another significant release: retail sales. After remaining unchanged last month, they’re expected to rise by 0.3% this time.

That’s it for today. Happy forex trading!

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