Compass Global Markets' Blog

28th November 2016 - Weekly Currency Market Report.

Posted by Thomas Su on November 29, 2016 at 10:12 AM

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The Market in Brief:

                                        • AUD up against the majors
                                        • AUDJPY at a fresh 7 month high.
                                        • USD Core Durable Goods Orders print +1.0% v expected +0.2%.
                                        • GBP Second Estimate GDP 0.5% as expected.

Market Events Due:

                                      • EUR Draghi speaks (Tue and Wed)
                                      • USD Prelim GDP, CB Consumer Confidence (Wed) ISM Manufacturing (Thur) Non Farm Payrolls and Unemployment Rate (Fri)
                                      • AUD Private Capital Expenditure (Thur) Retail Sales(Fri)
                                      • GBP Bank Stress Test Results (Wed) Manufacturing PMI (Thur)


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AUDUSD: The AUD closed the week up 1.5% after two consecutive down weeks against the USD. Importers breathed a sigh of relief as the AUD held at the critical level of support and bounced from a 5 month low. It broke through its first level of short term resistance on Wednesday and then tested the second level of resistance on Friday before retreating. Importers have the option of targeting that second level of resistance 20 points higher or looking to the next level which is 80 points higher. Exporters or those looking to buy AUD can target the post Brexit 5 month low we saw last Monday.

AUDEUR: Similar to the USD the AUD closed the week up 1.5% against the EUR. It is still 1% shy of the fresh 18 month high posted 2 weeks ago so importers can target that level again. There is certainly strong resistance up here as AUD has been at these levels for 5 of the last 6 weeks. Exporters or those looking to buy AUD can target last Monday's low.

AUDGBP: The AUD closed the week up 0.5% against the GBP after 3 consecutive weekly losses and its fresh 7 week low last Monday. It still represents a very good opportunity for those looking to buy AUD as it is still down 6.25% from the 40 month high at the end of October.

AUDNZD: The AUD closed the week up 0.7% against the NZD gaining back most of its losses from the week before. This currency pair has been confined to a reasonably tight 200 point range for the last 4 weeks. The ranges are still favouring the exporters and those looking to buy AUD as we are only 250 points above the 17 month low in mid September. Importers can target 150 points higher where the strong levels of resistance have held since June.

AUDJPY: The AUD posted its third consecutive weekly gain against the JPY hitting a fresh 7 month high on Friday. This represents a great opportunity for importers given the AUD is up almost 10% from its lows after Donald Trump's victory 3 weeks ago. There is resistance here given how far it has come in such a short time with a big line in the sand another 150 points higher.

AUDCHF: AUD posted its first up week after 4 consecutive down weeks against the CHF, closing a solid 1.7% higher. It's now only about 2% below the 18 month high posted at the end of last month. Interestingly enough on the charts since February this year the lows in AUDCHF have been slowly grinding higher.

Compass Global Markets Team.

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