Compass Global Markets' Blog

24th January 2017 - Weekly Currency Market Report.

Posted by Thomas Su on January 24, 2017 at 10:23 AM

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The Market in Brief:

                                                • AUD up against the majors but down against the GBP.
                                                • AUDEUR closes flat after posting a fresh 20 month high.
                                                • AUDUSD posts a fresh 2 month high.
                                                • AUD jobs print 13.5K V expected 10.2K and unemployment up from 5.7% to 5.8%.
                                                • U.S. data as expected and majority of U.K data positive

Market Events Due:

                                            • EUR ECB President Draghi speaks (Tue) German Ifo Business Climate (Wed)
                                            • GBP EU Membership Court Ruling (Tue) Preliminary GDP q/q (Thur)
                                            • AUD CPI q/q (Wed)
                                            • USD Advanced GDP q/q Core Durable Goods Orders (Sat)


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AUDUSD: AUD hit a fresh 2 month on Friday to post its 4th consecutive weekly rise against the USD. On the close it had rallied 5.5% over the last 4 weeks after being up 6% at one stage on Friday. The lows we saw at Christmas were fresh 7 month lows with AUDUSD last down there in May. At current levels it represents a very good opportunity for importers while exporters can target last Monday's lows which are 100 points lower. 

AUDEUR: The AUD closed the week flat against the EUR after posting a fresh 20 month high earlier in the week. Dovish comments by Mario Draghi put the EUR under a lot of pressure on Thursday night but it has since rebounded. Still a very good opportunity for importers. This is the fifth time in the last 4 months it has pushed up to these levels and we have generally seen a correction of around 3%.

AUDGBP: The AUD closed the week down 2% against the GBP. This was after it gapped higher on the open from panic over some comments about the Brexit. It was still shy of the 40 month highs seen in October but nonetheless great for importers. Exporters or those looking to buy AUD can target the December lows that held for the whole month which are still a distant 250 points away. The majority of U.K. data is still printing towards the upside. 

AUDNZD: The AUD closed the week up just 0.3% against the NZD to post its third weekly gain. However the high was still below the previous weeks high. This currency pair continues to trade within a very tight trading range of just 3% over the last 3 months. It did hit a fresh 3 month low in that Christmas period when AUD was under pressure across the board but has bounced back to the range. Importers can target 50 points higher with exporters 125 points below current levels.

AUDJPY: Similar to AUDUSD, AUD posted its fourth consecutive weekly gain against the JPY. It was only 45 points shy of the fresh 12 month high it hit in mid December. Still at very attractive levels for importers while exporters can target the Christmas lows which are 200 points away. AUD is still close to 12% higher than where it was after Donald Trump's was elected on 8th November. 

AUDCHF: AUD posted its third consecutive weekly gain against the CHF. Although it closed only 10 points higher it was 1% higher on Thursday. Its high was quite a big line in the sand as this level of resistance has held since April 2015, 21 months. AUDCHF has manged to rally 5% since its low on December 30th 2016. On the weekly charts the lows in AUDCHF since February last year continue to slowly grind higher.

Compass Global Markets Team.

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