Good morning,
Well we had the RBNZ and AUD unemployment event risks overnight come and go and my AUDNZD has suffered as a result…. The RBNZ was perhaps a little more dovish than most expected but in reality only really reiterated what the market already knew and that was that they wouldn’t move on rates until at least June of this year the only difference being that they would perhaps be a little more sluggish in the size and pace of these moves. The NZD had been very well bid all day ahead of the release and was quickly sold down on the back of the data. The Kiwi comes in a little better bid this morning but still has a fair distance to go to legitimize this trade….
On the other hand the Australian data was flat against and expectation of a 15k improvement and we saw the AUD sold off in small on the back of it. Chinese data and comments helped keep the commodity market bid and that in itself has put a floor under the AUDUSD which for now looks like it wants to test the 0.9250 level. Good offers on profit taking into 1.3120 on the AUDNZD and decent bids sitting around the 1.3020 level below. I will look to take back shorts on a dip and reevaluate on bounces higher.
Otherwise in the majors little to report outside of the Cable looking a little healthier this morning and pushing the case for more upside correction into 1.5200. I buy on dips today looking for 1.4930 to hold the downside and look to sell out of those longs around the 1.5080 level initially. The EURUSD remains range bound and the offers sitting into 1.3680 and 1.3730 look to cap the market for the time being. The equity market looks like it wants to reclaim the 1150 handle and perhaps higher and this will keep the EURUSD securely bid until the US open this afternoon.
The USDJPY has also benefited from the above story and now has its sights set on the 91.30 level at which point I will look at selling that strength all the way into 91.80. The USDCAD meanwhile looks like its forming yet another base around the 1.0230 mark and I continue to buy those dips while oil is overdone and gold is set for further retracement. I fail to believe this commodity story and maintain that this is the next bubble due to burst, so in line with that we should see commodity currencies give back recent gains on corrections.
Data wise today we have US trade balance and weekly jobs data neither of which is likely to shake the market too much as far as I’m concerned.
Best regards,
Ken Veksler.
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