The start of the week stuttered yesterday with an uneventful economic calendar leading to sideways chop as the majors consolidated at their highs. Nobody likes Mondays so how about we join forex markets and just skip through that one? The preview of central bank action throughout Asia in yesterday’s Daily Market Update stays relevant so definitely give that blog a read if you missed it.
With Monetary Policy Meeting Minutes out of Australia first up, this Bloomberg article and subsequent charts caught my eye. The Aussie dollar really has been the best performer over the past month or so, bucking the trend with moderately good economic data reflecting positively on the domestic economy, but most of all benefiting from commodity prices bouncing off lows and easing in Europe and NZ meaning money is flowing into Australian assets in search of yield.
“The swaps market is pricing in just 13 basis points of interest-rate reductions in the coming six months. That compares with 28 basis points as recently as March 9.”
Speaking of commodity prices bouncing off lows, no chart reflects this better than the oil daily:
Oil Daily:
But in saying that, price is still capped by resistance from the most obvious swing low (former support now acting as resistance). I really don’t mean to sound like a perma-bear when it comes to oil, I swear… But that level is hard to miss when you bring up a chart. Just saying.
Oil Hourly:
Zooming into the hourly and you can see that price is in a short term bullish channel. With price just bouncing off support here, if you are bullish commodities such as oil then this is your level to manage your risk around to play from the long side. There, see!
Chart of the Day:
With the topical AUD/USD and USD/JPY charts used in yesterday’s Central Banks’ Right of Reply blog, we have to move to the crosses today to find our key levels.
In the technical context of the above commodity prices, taking a contrarian view on the Aussie up here wouldn’t be a terrible play.
AUD/JPY Weekly:
The AUD/JPY weekly highlights the key resistance level that price has pushed into on the higher time frame chart.
AUD/JPY Hourly:
Zoom into the hourly chart and I’ve highlighted a few places that price is giving you a chance to manage your risk around.
REMEMBER RBA MONETARY POLICY MEETING MINUTES THIS MORNING.
On the Calendar Tuesday:
NZD RBNZ Gov Wheeler Speaks
AUD Monetary Policy Meeting Minutes
JPY Monetary Policy Statement
JPY BOJ Press Conference
USD Core Retail Sales m/m
USD PPI m/m
USD Retail Sales m/m
NZD GDT Price Index
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