Compass Global Markets' Blog

5th December 2016 - Weekly Currency Market Report.

Posted by Thomas Su on December 6, 2016 at 10:24 AM

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The Market in Brief:

                                          • AUD up against the USD and JPY and flat V CHF.
                                          • AUD down against EUR, GBP, CAD and NZD.
                                          • AUD posts fresh 7 month high against JPY
                                          • USD NFP 178k V expected 177k Unemployment Rate 4.6% V expected 4.9%

Market Events Due:

                                        • GBP Services PMI (Mon) Manufacturing Production (Wed)
                                        • AUD Cash Rate and RBA Statement (Tue) GDP q/q (Wed)
                                        • USD ISM Non-Manufacturing PMI (Tue) Prelim UoM Consumer Sentiment(Sat)
                                        • CNY Trade Balance (Thur)
                                        • EUR ECB Press Conference (Fri)


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AUDUSD: The AUD closed the week up only 14 points to post its second consecutive weekly gain against the USD. At one stage the AUD was down 125 points but it managed to bounce back. Data was mixed with AUD Private Capex coming in at -4.0% V expected -2.8% while Retail Sales came in at +0.5% V Expected +0.3%. All US data printed above expectations. Importers can target the resistance that held last week which is 50 points higher while Exporters or those looking to buy AUD can target 80 points lower where it bounced last week. Those with more time on their side can target the post Brexit 5 month low we saw 2 Monday's ago.

AUDEUR: The AUD closed the week down 0.4% against the EUR. It has since opened higher this morning and gained throughout the day where it has hit resistance that has held for the last 5 weeks. It is very close to the 18 month high posted on the day of the US election so it represents a great opportunity for importers. The EUR is falling across the board as Italy's Prime Minister Matteo Renzi resigns amid a landslide defeat in the referendum. 

AUDGBP: The AUD closed the week down just over 2% against the GBP. It has now closed lower 4 out of the last 5 weeks, hitting a fresh 10 week low last Thursday. There is short term support at these levels. It was only 6 weeks ago AUDGBP was at a fresh 40 month high so the drop has been significant and gives those looking to buy AUD their best levels in 2 1/2 months. 

AUDNZD: The AUD closed the week down just over 1 % against the NZD, giving up its gains from the week before. So this is now the 5th week this currency pair has been confined to a reasonably tight 200 point range. The ranges are still favouring the exporters and those looking to buy AUD as we are only 200 points above the 17 month low in mid September. Importers can target 200 points higher where the strong levels of resistance have held since June.

AUDJPY: The AUD posted its fourth consecutive weekly gain against the JPY hitting a fresh 7 month high on Thursday. It closed the week up 0.9% but the high posted was only 20 points higher than the previous week. This still 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. It has topped out around these levels for the last 7 trading days suggesting it may be running out of steam.

AUDCHF: AUD closed the week flat after previously posting its first up week after 4 consecutive down weeks against the CHF. AUD has had a solid run up today to be only 1.3% below the 18 month high posted at the end of October. Given it was a relatively tight range last week on the charts the lows in AUDCHF since February this year continue to slowly grind higher.

Compass Global Markets Team.

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