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Forex Trading StrategiesRanges persist ahead of US employment and ISM Non-manufacturing data. EUR/USD triggers at 1.2000 and 1.2150.
Big decline in stocks clouds the risk-willingness picture. Iran Security Council decision due today from IAEA
MAJOR HEADLINES â€“ PREVIOUS SESSION
â€˘ New Zealand Visitor Arrivals for December rose 1.9% vs. -1.3% in November
â€˘ Australia Performance of Service Index for January out at 52.7 vs. 51.6 in December
â€˘ Australia Retail Sales for December out at 0.4% vs. 0.5% expected
â€˘ Australia Trade Balance for December out at -1168M vs. -1800M expected
â€˘ Crude Oil prices fell heavily yesterday.
JPY fell weaker still in the crosses overnight, with EUR/JPY close to the multi-year high around 143.50.
THEMES TO WATCH â€“ UPCOMING SESSION
Fascinating market moves yesterday, with a huge down day in the stock market as stock markets supposedly fret about the interest rate implications of the low productivity figures. This all smells fishy - after all, the bond market actually staged a bit of a recovery yesterday from new lows and stocks should have been encouraged by the 3 dollar per barrel fall in oil over the last two days. Clearly, the focus is on the negative news suddenly. This sharp reversal in the trend toward aggressive risk willingness threw the USD a bit off course yesterday. This could just be jitters ahead of an important round of data today, or a signs of yet another reversal in our themes. As ever, with so many of our indicators failing of late, we'll try to be flexible and be ready for another reversal if it comes. Again, our game plane was to allow slippage in EUR/USD to 1.1900 or even 1.1800, but then looking for a recovery. A failure of 1.2000 is key for that view, obviously. If we zip above 1.2170, again, however, then the focus immediately reverts higher again. This really feels like a tough transition period for the market.
The Trade Balance data from Australia was very encouraging for that country's currency, as the November was suddenly very poor after Australia had seen several months of improving data that seemed to show the country was on the way toward a true Trade "balance". The best aspect of the December report was the huge climb registered in exports - as Australia exports a number of commodities from coal and minerals to agricultural products. AUD/USD would look good for further rises if it trades back above 0.7570. AUD/CAD higher, anyone?
All signs point to a strong employment report today from the US - the question being how the markets react? We've seen big moves higher in US rates and stocks lately - will the figures add fuel to the fire or will we see a reversal? Feels like an either/or kind of day when looking at the charts. Change in Nonfarm payrolls expected at 250K and Unemployment rate expected unchanged at 4.9%. The US ISM Non-manufacturing expected at 60.0 vs. 59.8 in December.
The IAEA is apparently scheduled to meet at 1400 GMT to decide whether to refer Iran to the UN Security Council. A referral is expected, so one wonders what the "surprise" scenario here is - perhaps a belligerent response from Iran, though they've already promised to renew full scale uranium enrichment should they be referred.
Note: the support/resistance levels used in the matrixâ€™s of this document are levels derived from yesterday high, low and close. Reference in the text to other support/resistance levels will occur.
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