Intraday Strategy Report

In The News
Fundamental drivers were in short supply outside of the Asia-Pacific region where New Zealand held rates,
Japanese GDP was revised higher and Australia had another blockbuster employment report. The overall tone of markets is subdued with most pairs trading little changed on the day.

The top news was Australia’s jobs report. The economy added 54.6K jobs compared to the 20K expected and the unemployment rate dropped to 5.2% from 5.4%. All the jobs were full-time and the participation rate is the highest on record so there is absolutely no caveat to the jobs report. AUD/USD is the best G10 performer; the pair jumped 60 pips after the data release but it has struggled to continue finding upside traction.

The New Zealand dollar fell after the RBNZ held rates at 3% and said interest rate rises over the next two years will be limited. The Bank of England rate decision was a non-event, as expected. Interest rates were left at 0.50% and the bond purchase plan left unchanged at £200 billion, as forecast by all 34 economists surveyed by Bloomberg.

In the United States, initial jobless claims fell to 421K from 438K in last week’s report. The slide was virtually inline with the consensus estimate of 425K. The good news was in the continuing claims report, which fell to 4086K from 4237K.

EURUSD Comments

The euro climbed in Asia-Pacific trading but sentiment reversed in Europe, sending the euro into negative territory. The euroarea periphery is quiet with bonds spreads inching wider. Flows appear to be driving the moves.

Strategy
EUR/USD continues to consolidate within the range of the past week. The euro is  near key short-term support at 1.3180 but with the lower Bollinger band in play, the most likely move is a drift higher in North America. No critical data or news is expected.

Support Resistance
1.3180 1.3322
1.3060 1.3400
1.2968 1.3438

AUDUSD Comments

Australian employment rose 54.6K compared to the 20K expected with all the jobs in the full-time sphere. It’s the eighth consecutive month of better-than-expected employment data.

Strategy
AUD/USD reversed a two-day slide following yet another blockbuster employment report and it is the best performing G10 currency. Expect this pair to creep back toward 0.9965 but remain cautious of a Chinese interest rate hike.

Key Levels
Support Resistance
0.9825 0.9884
0.9752 0.9965
0.9700 1.0000

Full chart report: Intraday EUR/USD and AUD/USD Strategy Report