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14 Jun 2013
AUD/USD positioning to challenge 0.9600
FXstreet.com (London) - AUD/USD has been drifting higher since the open, through 0.9600 to be rejected at 0.9632. Now, the pair is challenging the figure to the downside post bullish US data.
Bearish fundamental tone for AUD/USD
The economy in Australia is lacklustre and more threats to the pair appear as the mining sector begins to slump. Despite a recent bounce, the fundamental tone is still tremendously bearish for the pair. NAB said the better than expected local employment report may have been the initial catalyst for the bounce, reducing as it does the urgency with which the RBA needs to be contemplating further rate cuts. He added, that along the way, the G10 commodity/dollar block currencies that have benefited most from US dollar weakness, AUD and NZD have suffered the most. Markets are of course tuning into the heavy US data count this afternoon, which has so far been the catalysts for the pairs decline as further bullish numbers are arriving this week. Remembering, yesterday, Jobless Claims decreased to 334K vs 346K while US May Retail Sales (MoM) are up to 0.6% vs 0.1% in Apr. Ex-autos 0.3% vs. -0.1%. There had been a delayed response to the USD friendly outcome, while today, we have seen May PPI while Michigan confidence for June is coming up a little later. TD Securities said for the latter, markets are looking for an unchanged reading of 84.5 after what was already a pretty big jump higher in May. For PPI, markets were looking for a 1.4% YoY but data hit the wires printing 1.7% while PPI excluding food and energy came inline with expectations 1.7%. The pair have started to drift south on that release.
AUD/USD bullish Technicals
Although the fundamentals are looking bearish for the pair, Saeed Amen, strategist at Nomura explains the technical for AUD/USD are looking bullish for next week and ranging. First, bandwidth is very low. He say’s this suggests a continuation of range trading. Hence, a retracement higher looks likely. Also, he said, the RSI is moving higher, suggesting upward momentum, off from heavily oversold levels, suggesting a short-term low has already been reached. Their target is 0.9790.
Bearish fundamental tone for AUD/USD
The economy in Australia is lacklustre and more threats to the pair appear as the mining sector begins to slump. Despite a recent bounce, the fundamental tone is still tremendously bearish for the pair. NAB said the better than expected local employment report may have been the initial catalyst for the bounce, reducing as it does the urgency with which the RBA needs to be contemplating further rate cuts. He added, that along the way, the G10 commodity/dollar block currencies that have benefited most from US dollar weakness, AUD and NZD have suffered the most. Markets are of course tuning into the heavy US data count this afternoon, which has so far been the catalysts for the pairs decline as further bullish numbers are arriving this week. Remembering, yesterday, Jobless Claims decreased to 334K vs 346K while US May Retail Sales (MoM) are up to 0.6% vs 0.1% in Apr. Ex-autos 0.3% vs. -0.1%. There had been a delayed response to the USD friendly outcome, while today, we have seen May PPI while Michigan confidence for June is coming up a little later. TD Securities said for the latter, markets are looking for an unchanged reading of 84.5 after what was already a pretty big jump higher in May. For PPI, markets were looking for a 1.4% YoY but data hit the wires printing 1.7% while PPI excluding food and energy came inline with expectations 1.7%. The pair have started to drift south on that release.
AUD/USD bullish Technicals
Although the fundamentals are looking bearish for the pair, Saeed Amen, strategist at Nomura explains the technical for AUD/USD are looking bullish for next week and ranging. First, bandwidth is very low. He say’s this suggests a continuation of range trading. Hence, a retracement higher looks likely. Also, he said, the RSI is moving higher, suggesting upward momentum, off from heavily oversold levels, suggesting a short-term low has already been reached. Their target is 0.9790.