Compass Global Markets' Blog

7th November 2016 - Weekly Currency Market Report.

Posted by Thomas Su on November 8, 2016 at 8:12 AM

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The Market in Brief:

                                    • AUD up V USD and CAD, down V EUR, GBP, JPY, NZD and CHF.
                                    • RBA leaves cash rate at 1.5% as expected.
                                    • Fed leaves rates on hold as expected. NFP print 161k V expected 174K with unemployment steady at 4.9%. 
                                    GBP Construction PMI and Services PMI print above expectations.

Market Events Due:

                                  • CNY Trade Balance (Tue)
                                  • GBP Manufacturing Production (Tue) 
                                  • USD Presidential Election (Wed) Unemployment Claims (Fri) Prelim UoM Consumer Sentiment (Sat)
                                  NZD Official Cash Rate RBNZ Rate Statement


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AUDUSD: The AUD closed the week 1.1% higher against the USD after closing slightly lower the previous 2 weeks. We are about 50 points shy of the of the solid levels of resistance that have held over the last 5 months. The RBA left rates on hold at 1.5% as expected and whilst building approvals disappointed (-8.7% v expected -2.8%) the trade balance came in better than expected (-1.23bn v expected -1.71bn). In the US the Fed left rates on hold at 0.5% as expected with NFP printing 161K v expected 174K and the unemployment rate steady at 4.9%. Focus is on the US Presidential Election on Wednesday. The first level of support for those looking to buy AUD is 120 points below.

AUDEUR: The AUD finished the week down 0.3% to post its second consecutive week down against the EUR. It's down 2.75% since posting the fresh 17 month high 2 weeks ago. There is short term support here as this was the level of resistance that held for about 6 months. Importers with time on their side can target that 17 month high while exporters can target 70 points lower if the short term support breaks.

AUDGBP: AUD closed the week 1.7% lower against the GBP after hitting a fresh 40 month high the previous week. This is its largest weekly drop against the GBP since the Brexit. There is short term support here as we are almost at the same levels it closed after the flash crash  4 weeks ago. If that breaks the next solid level of support is 2.5% below. 

AUDNZD: The AUD closed the week down 1.2% against the Kiwi to post its 3rd weekly loss which has it off 2.65% over the last 3 weeks. There is quite solid short term support here with the 17 month low another 250 points below current levels. 

AUDJPY: The AUD closed the week down just 0.2% after posting a fresh 4 month high last Tuesday. AUD has now posted gains 5 out of the last 7 weeks against the JPY. Short term resistance is 100 points higher with the post Brexit high 200 points higher. Exporters can look for the short term support which is 1% lower.

AUDCHF: AUD closed the week down 0.85% posting its second consecutive weekly drop against the CHF down 2.6% from its fresh 18 month high 2 weeks ago. In the short term support sits 50 points below with resistance 1% higher.  

Compass Global Markets Team.

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