Back in the office after the Australian Queen’s Birthday holiday… that isn’t actually the Queen’s birthday. An interesting one for you to ponder this morning before things heat up with data out of Australia and China during the Asian session.
The majors have given back all of their NFP number USD gains on the back of ‘good news’ out of Greece combined with Obama’s comments coming out of the G7 meetings. It was reported that Obama had said that the strong USD is a problem for the US economy with challenges arising from it’s appreciation needing to be overcome. Of course Washington has come out and denied these reports as the Fed is moving towards the tightening of monetary policy, but of course it was said. Tow that Fed line Barack!
Although the US is not an export driven economy to the extent of say Australia or Canada, the stronger currency poses problems in terms of overseas corporate earnings and lower inflation. The inflation issue is the big one for the Fed’s tightening aspirations, with inflation currently at the lower end of the target band.
How quickly the markets forget the good jobs numbers on the back of comments from someone not involved in monetary policy decisions. Something to think about as EUR/USD pushes back into a supply zone on the daily.
On the Calendar Today:
Only Asian numbers on the calendar today out of Australia and China. Keep an eye out for comments and direction as markets continue to digest Friday’s NFP number. Comments from the G7 meetings also trickling through.
AUD NAB Business Confidence
Chart of the Day:
On the daily chart, AUD/USD is continuing within it’s 500 pip range between 80 and 75 cents after it’s long down trend over the last few years.
Zooming into the hourly chart, we have a nice double bottom forming right into the higher time frame demand zone. A good place for low risk longs to come into the market.
With today’s business confidence and Chinese CPI data to come, this is the zone to trade around.
Dane Williams – @VantageFX
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