Compass Global Markets' Blog

11th October 2016 - Weekly Currency Market Report.

Posted by Thomas Su on October 11, 2016 at 11:33 AM

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The Market in Brief:

                                  • AUD down V USD, EUR and CHF and up V GBP, JPY, NZD and CAD.
                                  • AUD RBA leaves rates on hold at 1.5% as expected and AUD data prints above expectations
                                  • AUD hits fresh 40 month high against GBP.
                                  • USD Non Farm Payrolls 156k V expected 171k. Unemployment up from 4.9% to 5.0%. 

Market Events Due:

                                • EUR German ZEW Economic Sentiment (Tue)
                                • USD FOMC minutes (Thur) Retail Sales and PPI (Fri) Prelim UoM Consumer Sentiment and Fed Chair Yellen speaks (Sat)
                                • CNY Trade balance (Thur)


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AUDUSD: The AUD finished the week down around 1% against the USD after closing higher the previous 2 weeks. AUD managed to get within 15 points of the solid level of resistance which sits 100 points higher. US Non Farm Payrolls printed 15,000 jobs below expectations and unemployment was up 1 tick to 5.0%. The USD initially weakened but then made back those losses within a couple of hours. Exporters or those looking to buy AUD can target Friday night's lows, 50 points below. If that level breaks there is solid support 100 points lower which has held since July.

AUDEUR: The AUD finished the week down 0.8% against the EUR after closing higher the previous 2 weeks. The medium term resistance that has held since March this year held in place again. Importers can target that level which is 80 points higher considering that apart from 2 occasions that level of resistance has held in place since June last year.

AUDGBP: AUD posted its fourth consecutive weekly gain against the GBP which was a fresh 40 month high. The rapid fall in the GBP on Friday morning was blamed on computer driven orders. At the moment AUD is up 17% against the GBP since the day of Brexit and up 27% in 14 months. The majority of the UK data however printed above expectations.

AUDNZD: The AUD closed the week up 0.5% against the Kiwi. It has been trading around this level for the last 4 days now providing short term resistance. The AUD is up 3.5% from the 17 month low 4 weeks ago. Short term support sits 100 points lower.

AUDJPY: The AUD closed the week up 0.8% against the JPY, posting its 3rd consecutive weekly gain. This currency pair has been in a relatively tight range for almost 3 months now. At the moment it is marginally towards the upper end of the range since mid June. Importers are looking at short term resistance 75 points higher and if that breaks there is further resistance another 100 points higher.

AUDCHF: AUD closed the week down 0.5% against the CHF. Similar to the JPY it too has been stuck in a relatively tight range. The solid resistance that has held in place since November was almost tested before turning rather quickly. That level sits 100 points higher.

Compass Global Markets Team.

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