Asian Data Dump Tuesday

March 1, 2016

Asian Data Dump Tuesday:
After yesterday’s relatively slow news day we get a huge data dump today during Asia. With both Chinese and Australian news on the cards, we’re capped off by the RBA cash rate decision later this afternoon!

Overnight we got a shock early move from the PBOC who again cut the emerging economy’s Reserve Requirement Ratio (RRR) by 50bps to 17%. The move will have an effect on the banks’ lending numbers and will attempt to stimulate the economy through increased lending capabilities and capital outflows.

Markets like the Aussie Dollar aren’t reacting to these cuts like it used to (see today’s chart of the day) and a slow grind is expected from here. I’m most interested in seeing how this effects the PBOC’s ability to continue to keep their controlled currency steady as money flows out of the country and the Yuan weakens on the back of the move.

Moving forward to some charts and with the month of February coming to an end, US stocks closed back below short term resistance:

SP500 Daily:
Indices chart, SP500 Daily 160301
Click on chart to see a larger view.

SP500 4 Hour:
Indices chart, SP500 4 Hourly 160301
Click on chart to see a larger view.

With the market down almost 10% for the calendar year, last week’s rally was welcome relief for the bulls. Too bad it came on horribly low volume and couldn’t sustain the rally to even close above the short term level…

To me this shows a horrible lack of conviction for the bulls and fully expect the bears to continue having control throughout March.

Weekly trend lines anyone?

———-

Chart of the Day:
Following the last Australian employment data release, we featured this AUD/USD 4 hour setup as our chart of the day, and follow up again today.

For contenxt, while price sits where it does on the weekly chart, my bias is still to the long side.

AUD/USD 4 Hour:
Forex chart, AUDUSD 4 Hourly 160301
Click on chart to see a larger view.

Now looking at the 4 hourly and after bouncing off lows, price has come back to test trend line support. I still like using the level to play from the long side in this instance, purely because of where we sit on the higher time frame.

AUD/USD 15 Minute:
Forex chart, AUDUSD 15 Minute 160301
Click on chart to see a larger view.

The 15 minute shows price playing with previous support possibly turned resistance at a swing low, but with the raft of Australian economic data out today, that short term level isn’t significant enough to use as something to manage risk around. With building approvals and a whole raft of Chinese manufacturing releases to come before the cash rate decision, using short term levels here isn’t the smartest thing you could do as a trader.

Which levels are you watching on the Aussie?

———

On the Calendar Tuesday:
AUD Building Approvals m/m
AUD Current Account

CNY Manufacturing PMI
CNY Non-Manufacturing PMI
CNY Caixin Manufacturing PMI

AUD Cash Rate
AUD RBA Rate Statement

GBP Manufacturing PMI

CAD GDP m/m

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Dane Williams – @VantageFX

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