It was mostly stocks and commodities that took what headlines there were today, driven by the U.S. nonfarm productivity which unexpectedly fell in the second quarter, pointing to sustained weakness that could raise concerns about corporate profits and companies' ability to maintain their recent robust pace of hiring. The S+P made yet another all-time high (before a mild downturn) which we have been doing pip-by-pip for some time now, while WTI continued its recent bounce by hitting a 3 week high before fading a little later in the day following the US data. In the currencies, the AUD continues to shine while elsewhere it was choppy but without too much going on, although the dollar generally lost a little of its shine of the previous sessions following Friday’s US jobs data.
Wednesday will be another quiet one with regards to data so it could be another rangebound one. There is nothing to come from either the EU or the US and the major interest of the day will be from Australia, where the WBC Consumer Confidence and a speech from the outgoing RBA Governor Glenn Stevens are both due. There may be some volatility in the Kiwi as the market jockey’s for position ahead of the RBNZ Interest Rate Decision due early on Thursday morning, where a rate cut is pretty much expected and may be written into the price, although I still think we are likely to see a dip.
I’m flying from London to Sydney on Thursday so the next update from me will be on Monday.
EURUSD: 1.1105
24 Hour Bias: Choppy - Neutral
Medium Term Bias: Neutral
EUR/USD looks set to remain pretty choppy near 1.1100, and with little US data due today I would not be getting too carried away in either direction. With the northern hemisphere in full holiday mode, just trading the daily ranges would seem the way to go without looking for too much more.
Economic data highlights will include:
-
US MBE Mortgage Applications, EIA weekly crude oil stock change, Monthly Budget Statement
USDJPY: 101.90
24 Hour Bias: Neutral
Medium Term Bias: Prefer to Sell Rallies
While the 4 hour charts look mildly constructive, the dailies still point lower, so while we could see another minor bounce in the coming session, I prefer to use any such move to sell into rallies for the eventual, medium term move lower, I suspect towards 100.00.
Economic data highlights will include:
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Machinery Orders, Domestic Corporate Goods Price Index, Tertiary Industry Index
GBPUSD: 1.3005
24 Hour Bias: Mildly Bearish
Medium Term Bias: Neutral
Cable is a lower again and has now broken below 1.3000, placed under pressure today after BOE Monetary Policy Committee member, McCafferty, hinted in a Times article that the bank may be prepared to do ease further, but added that he preferred a "learn as we go" approach following the decision to leave the EU. There is some Fibo support at 1.2955 – which has been tested and so far, held - with apparently some stops placed below there, which could drive it a little lower, if triggered. Overall, with the lack of any data due today, it may be rangebound and the dailies suggest that that it may remain choppy near 1.3000 over the next few days.
Economic data highlights will include:
- n/a
USDCHF: 0.9821
24 Hour Bias: Mildly Bullish
Medium Term Bias: Neutral
USD/CHF has had a choppy start to the week, but generally seems to underpinned for the time being. The dailies are flat, so I am not getting too excited on the topside but the 4 hourlies still look positive – albeit that they may be showing early signs of topping out - so a run towards 0.9875/0.9900 seems possible.
Economic data highlights will include:
- n/a
AUDUSD: 0.7670
24 Hour Medium Term Bias: Neutral
The Aussie remains underpinned and today reached up to a new trend high of 0.7686. There is a bit of Australian data due (Consumer Confidence, Housing Data), as well as a speech by RBA Governor, Glenn Stevens, so we could see some choppy action later on. The shorter-term momentum indicators appear to be showing some minor bearish divergence, so the upside might be somewhat limited from here although the dailies do remain mildly supportive, so it may be that we should expect further choppy trade with some mild upside momentum in coming sessions. Overall, I would expect a choppy day of trade, although Stevens may take one of his last chances as Governor to try and talk the Aud lower.
Economic data highlights will include:
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WBC Consumer Confidence, Investment Lending for Homes, Home Loans, Governor Stevens Speech
NZDUSD: 0.7163
24 Hour Bias: Prefer to sell rallies
Medium Term Bias: Mildly Bearish
The momentum indicators are now generally flat, suggesting caution, but with the RBNZ Interest Rate Decision coming up tomorrow I prefer to use any near term strength to sell into, hoping to remain short over the announcement of any rate cut, which appears to be on its way. If so, it might be prudent to take a quick profit in the Kiwi. Given the current strength of the AUD, and the fact that the market is expecting to see the RBNZ act, any push lower might be rather short lived.
Economic data highlights will include:
- n/a
Jim Langlands
FX Charts
www.fxchartsdaily.com
Originally published by AxiTrader
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