AUD/USD – Aussie Slide Continues on Weak Job Data

The Australian dollar continues to lose ground on Friday, as AUD/USD trades slightly above the 0.87 line in the European session. The Aussie had looked sharp earlier in the week, but has surrendered most of those gains. On the release front, Australian Employment Change was down sharply, contracting by -29.7 thousand. On Friday, Home Loans posted a decline of 0.9%. In the US, there are no major releases on the calendar.

The Aussie continues to display strong movement this week. After climbing about 150 points earlier in the week, the currency has coughed up most of those gains, trading close to the 0.87 line. AUD/USD lost ground following dismal job numbers on Thursday, Employment Change, which had jumped some 120 thousand in July, posted a sharp decline of 29.7 thousand in the September reading. The markets had anticipated a gain of 17.6 thousand. The unemployment rate remained unchanged at 6.1%, matching the estimate.

The RBA has continually complained about the high value of the Australian dollar, saying that it was impeding economic growth. After the Aussie sank in September, in which it lost some 500 points, one might have thought that the RBA would cut the currency some slack in Tuesday’s rate statement. However, the RBA did not change its tune, stating that although the Aussie has lost ground to the US, it remained high by historical standards and continues to weigh on the economy.

US Unemployment Claims were unchanged, coming in at 287 thousand for a second straight week. This beat the estimate of 291 thousand. The indicator has now exceeded the forecast for four straight readings. Earlier in the week, JOLTS Job Openings climbed to 4.84 million, up from 4.67 million a month earlier. These numbers follow last week’s excellent Nonfarm Payrolls, pointing to a stronger job market in the US. With QE slated to end later this month, the focus will shift to the timetable for an interest rake hike, which could take place in the first half of 2015.

Earlier in the week, the FOMC minutes of the last policy meeting were unexpectedly dovish. In the minutes, the Fed poured some cold water on rising expectations of a rate hike, as a number of policymakers said that the Federal Reserve should take a more data-dependent approach regarding a rate hike. The Fed also voiced concern about the rising strength of the US dollar which could weigh on the recovery. These factors could well support keeping the current accommodative policy in place.

AUD/USD for Friday, October 10, 2014

AUD/USD October 10 at 11:55 GMT

AUD/USD 0.8712 H: 0.8785 L: 0.8706

AUD/USD Technical

S3	S2	S1	R1	R2	R3
0.8456	0.8550	0.8668	0.8763	0.8820	0.8953

• AUD/USD posted sharp losses in the Asian session, breaking below resistance at 0.8763. The pair has edged lower in the European session.


• On the upside, 0.8763 has reverted to a resistance role as the pair trades at lower levels. 0.8820 is stronger.


• 0.8668 is an immediate support line. 0.8550 is next.


• Current range: 0.8668 to 0.8763

Further levels in both directions:

• Below: 0.8668, 0.8550, 0.8456 and 0.8315


• Above: 0.8763, 0.8820, 0.8953, 0.9020 and 0.9119

OANDA’s Open Positions Ratio

AUD/USD ratio has a majority of long positions, indicative of trader bias towards AUD/USD reversing directions and moving higher.

AUD/USD Fundamentals

• 00:30 Australian Home Loans. Estimate +0.2%. Actual -0.9%.


• 00:45 RBA Assistant Governor Malcolm Edey Speaks.


• 12:30 US Import Prices. Estimate -0.5%.


• 13:00 US FOMC Member Charles Plosser Speaks.


• 18:00 US Federal Budget Balance.


• 19:30 US FOMC Member Richard Fisher Speaks.

* Key releases are highlighted in bold

*All release times are GMT

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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USD/JPY – Yen Rally Continues After BoJ Statement

The Japanese yen continues to move higher on Tuesday, as USD/JPY is trading in the low-108 range in European session. The pair has gained about 150 points since the start of the week, erasing Friday’s sharp losses. On the release front, the BoJ did not introduce any new monetary easing measures. In the US, today’s highlight is JOLTS Job Openings, an important employment indicator. The markets are expecting a slight improvement in the September reading.

As expected, the BoJ did not make any changes to monetary policy in its policy statement on Tuesday. The central bank noted that the economy was recovering moderately, while acknowledging that domestic demand was down after the sales tax hike in April. Currently, the BoJ is increasing the monetary base at an annual pace of 60-70 trillion yen. With the yen trading close to six-year lows, the BoJ is unlikely to increase stimulus, as this would further weaken the yen.

US employment data sparkled on Friday, helping the US dollar post gains against the wobbly euro. Nonfarm Employment change rebounded in September, climbing to 248 thousand. This exceeded expectations of 216 thousand. The unemployment rate dipped to 5.9%, the first time it’s been below the 6% threshold in over six years. With QE slated to end later this month, the focus will shift to the timetable for an interest rake hike. Strong job numbers such as these could put pressure on the Fed to make an interest rate move sooner rather than later in 2015, and increased speculation about a rate move will likely boost the dollar even further.

USD/JPY for Tuesday, October 7, 2014

USD/JPY October 7 at 13:40 GMT

USD/JPY 108.23 H: 109.23 L: 108.11

USD/JPY Technical

S3	S2	S1	R1	R2	R3
105.44	106.85	107.68	108.58	109.82	110.68

• USD/JPY moved higher in the Asian session but then gave up these gains. The pair continued to lose ground in the European session and broke below support at 108.58. The yen has gained more ground early in the North American trade.


• 107.68 is the next support level.


• 108.58 has reverted to a resistance role as the yen trades at higher levels. 109.82 is stronger.


• Current range: 107.68 to 108.58

Further levels in both directions:

• Below: 107.68, 106.85, 105.44 and 104.68


• Above: 108.58, 109.82, 110.68, 112.48 and 113.68

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in short positions on Tuesday. This is consistent with the pair’s movement, as the yen continues to pick up ground against the dollar. The ratio has a majority of short positions, indicative of trader bias towards the yen continuing this week’s rally.

USD/JPY Fundamentals

• 4:54 BoJ Monetary Policy Statement.


• 5:00 Japanese Leading Indicators. Estimate 1042%. Actual 104.0%.


• 6:32 BoJ Press Conference.


• 14:00 US JOLTS Job Openings. Estimate 4.71M.


• 14:00 US IBD/TIPP Economic Optimism. Estimate 46.3 points.


• 17:20 US FOMC Member Narayana Kocherlakota Speaks.


• 19:00 US FOMC Member William Dudley Speaks.


• 19:00 US Consumer Credit. Estimate 20.3B.

*Key releases are highlighted in bold

*All release times are GMT

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

MarketPulse

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Compression Continues as Breakout Beckons in Apple AAPL

Apple shares (AAPL) continue their triangle or “EMA Compression” pattern as we await an official breakout trade entry trigger.

Let’s update our “Triangle Trade” chart from last week and focus on the key trigger-entry levels along with the potential targets to paly for should an actual breakout occur soon.

We’ll start with the daily chart:

Again, see last week’s post as the Triangle was developing (the triangle pattern continues for shares).

The Daily Chart simply highlights a compression of price between the 20 and 50 EMA as price plays ping-pong between these two indicators.

Officially, the falling 20 day EMA intersects $ 100.30 while the rising 50 day EMA plays at $ 98.70. Note how buyers and sellers have used these levels as short-term pivots.

A simple breakdown impulse under the $ 98.00 per share level opens a “sell pathway” toward the prior lows at the $ 94.00 per share level.

The divergences and distribution volume hint that this outcome may be favored for shares.

However, a pro-trend continuation breakout trigger beyond the $ 101.00 level suggests that price can rally toward the $ 104.00 prior high and perhaps even beyond that on a true trend continuation movement.

We can see the price pattern (triangle) clearer on the lower frame:

The hourly chart – in this case a compressed two-hour chart – shows the dominant price pattern – that of a Symmetrical Triangle or compression pattern developing as drawn.

The lower support line intersects today’s low (where buyers defended) at the $ 98.00 per share level and shares trade directly in the middle of the pattern at the $ 100 per share “round number” reference.

The main idea is that we should continue to remain neutral on Apple shares as price plays “ping-pong” between these two converging price-based trendlines.

A breakdown under $ 98.00 triggers a potential liquidation breakdown (targeting $ 94.00) while a breakout above $ 101.50 continues the uptrend and suggests $ 103.50 to $ 104.00 may be in play as upside targets.

Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

Corey Rosenbloom, CMT

Afraid to Trade.com

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

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Creeper Trend Continues Intraday Update and Stock Scan Sept 23

Here we go again! The market continued its slide lower – as was widely expected – and so far is creating another trend day lower.

However, not all is bearish in the market, as seen from our intraday stock scan.

Let’s jump into today’s update with an update on the S&P 500:

I expanded more detail Monday’s “Planning the Pullback in the US Stock Market” so be sure to view the higher frame support/inflection level which broke – and price continued trading lower.

The failure to hold the 1,994 level resulted in a continuation of the ongoing sell-off, and now the index not only broke 1,990 but now trades into the 1,985 level.

Yes, there are positive momentum divergences, but we must continue to follow price during the “creeper” or steady sell-off as price continues its logical higher timeframe retracement.

Sector Breadth is not quite as remarkable as yesterday:

The picture is mixed, with today’s sector strength in the Technology and Energy sectors and relative weakness across the board (especially Financials and Staples).

As I mentioned, not everything is bearish today – here are our bullish stock candidates for the session:

CF Industries (CF), Patterson Companies (PDCO), Apple (AAPL), and Biogen (BIIB).

I posted on a triangle pattern in Apple shares yesterday, and price did break through the upper trendline to continue the trend.

If instead you believe the market will continue its sell-swing lower into the close, focus on these bear candidates:

CarMax (KMX), Medtronic (MDT), ADT Corp (ADT), and Northrup Grumman (NOC).

Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

Corey Rosenbloom, CMT

Afraid to Trade.com

Follow Corey on Twitter: http://ift.tt/178Lhrq

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

Afraid to Trade.com Blog

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U.S. Dollar Continues Winning Streak

The dollar had the longest rally since teenagers bought Beatles albums and Lyndon Johnson was president as the Federal Reserve signaled interest rates will rise next year while other central banks pushed stimulus plans.

The U.S. Dollar Index rose for a 10th consecutive week, the longest since at least March 1967. Sterling rose after Scotland rejected independence, reviving bets the Bank of England will join the Fed in raising rates. The yen fell versus all of its 16 major peers as the Bank of Japan pledged to maintain stimulus to fight deflation, while the European Central Bank debuted a loan program. A report next week may revise second-quarter U.S. economic growth higher.

“The Fed and the BOE are the two central banks that’ll start hiking rates next year, and we like being long dollar and sterling,” said Athanasios Vamvakidis, head of Group of 10 foreign-exchange strategy at Bank of America Merrill Lynch in London. “There’s more room for investors to accumulate long positions on the dollar.” Long positions are bets a currency will gain.

Bloomberg

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