Checking out AUD/USD for today’s session with downside momentum in play ahead of Aussie jobs & U.S. retail sales data ahead.
Intermarket Snapshot
| Equity Markets | Bond Yields | Commodities & Crypto |
| DAX: 11510.10 -2.04% FTSE: 7154.60 -1.33% S&P 500: 2882.40 -1.50% DJIA: 25887.46 -1.49% |
US 10-yr 1.606% -0.074 Bund 10-YR -0.641% -0.032 UK 10-YR: 0.459% -0.034 JPN 10-YR: -0.224% +0.016 |
Oil: 55.04 -3.61% Gold: 1526.60 0.83% Bitcoin: 10548.21 -2.92% Etherium: 205.82 -1.62% |
Fresh Market Headlines & Economic Data:
- Yield Curves Invert in U.S., U.K. as ‘Doom and Gloom’ Spreads
- Oil falls 3% on disappointing economic data from Europe and China
- U.S. import prices unexpectedly rise, but trend still weak
- China slowdown persists as industrial economy posts worst growth since February 2002
- UK inflation unexpectedly overshoots BoE target in July
- Boris Johnson admits chance of no-deal Brexit is now no longer ‘a million to one’
- German economy shrinks as ‘golden decade’ comes to an end
- GDP and employment both up by 0.2% in the euro area
- Industrial production down by 1.6% in euro area
- Australian Consumer Sentiment Rebounds in August: Survey
- The ANZ Monthly Inflation Gauge was up 0.5% m/m in July; Annual inflation in the Gauge rose to 2.8%
Upcoming Potential Catalysts on the Forex Calendar:
- RBA Debelle speaks in Sydney 12:00 am GMT (Aug. 15)
- Australia employment at 2:30 am GMT (Aug. 15)
- Japan Industrial production at 5:30 am GMT (Aug. 15)
- U.K. Retail sales at 9:30 am GMT (Aug. 15)
- Canada ADP payroll estimates at 1:30 pm GMT (Aug. 15)
- U.S. Retail sales, Philly Fed manufacturing, Empire State manufacturing at 1:30 pm GMT (Aug. 15)
What to Watch: AUD/USD
Rough day for risk-on trades after terrible numbers from China gets the fear going, and then yield curve inversions lights aversion sentiment on fire so far in this Wednesday session. This mean that today’s watchlist pair, AUD/USD, was on a move straight down through Asia and European trade, and now it’s testing a minor psychological level that’s held as support over pretty much through August. Is it time for that level to break?
Well looking forward, we’ve got a highly likely market mover from Australia in the form of the latest employment data, with expectations for the net change to improve over last month’s read. And we’ve got a slew of economic data from the U.S., most notably retail sales and the manufacturing index numbers from a couple of districts, to keep volatility up for the U.S. dollar.
Right now, the odds are in favor of the bears given the price trend and the risk-off environment, and if Aussie jobs disappoints, a break of the support area around 0.6750 should be the cue to start building short position that could be played on both the shorter and longer term time frames. For the more aggressive trader types, building a short position now with nibblers makes sense up to the 0.6800 – 0.6850 area.
If you’re a bull on AUD/USD, it’s probably best to wait and see if Australia does post up positive jobs updates, and if the market pops on the news. Given the down trend and risk-off environment, that reaction could be short lived so it’s probably a good idea to keep your exits tight unless we see a super positive development in the U.S.-China trade story.