Monday 05/12
2:45pm, EUR, ECB President Lagarde Speaks
Tuesday 06/12
4am, USD, ISM Services PMI
Forecast: 53.5
Previous: 54.4
4:30pm, AUD, Cash Rate
Forecast: 3.10%
Previous: 2.85%
4:30pm, AUD, RBA Rate Statement
Wednesday 07/12
1:30pm, AUD, GDP q/q
Forecast: 0.60%
Previous: 0.90% Read more
The Australian Dollar (AUD) gave back gains Monday as risk sentiment soured, the Euro (EUR) safe play taking price to 0.6395 (1.5640) off the weekly open of 0.6495 (1.5400). Also of note, the EUR seems better supported off the back of a hawkish tone of late from the ECB. Eurozone inflation expectations prints tomorrow, predicted to stay over 10% for the third month straight. Unless there is a significant drop in the number we expect the ECB to look at another 75-point hike of their interest rate when they meet on the 15th of December. We think 0.6390 (1.5650) should hold.
Current Level: 0.6430 (1.5552)
Resistance: 0.6565 (1.6170)
Support: 0.6185 (1.5230)
Last Weeks Range: 0.6430-0.6511 (1.5357-1.5551)
The Australian Dollar (AUD) is still underperforming generally and against the British Pound (GBP) extending declines, slipping to 0.5535 (1.8070) early today before recovering to 0.5565 (1.7970). The downward trend could continue as “risk” deteriorates from China lockdown protests. It’s a light week on the economic calendar so big picture mood will dominate moves this week.
Current Level: 0.5560 (1.7985)
Resistance: 0.5625 (1.8370)
Support: 0.5445 (1.7780)
Last Weeks Range: 0.5555-0.5625 (1.7776-1.7999)
The Australian Dollar (AUD) fell back Monday to 0.6640 giving back a chunk of last week’s gains as market risk sentiment was shaken by China covid lockdown protests. With a slew of US data publishing late this week ending with (NFP) Non-Farm Payroll it’s shaping into a volatile week of action. Aussie Retail Sales came in at -0.2% from 0.5% predicted adding to the downside pressures. Meanwhile RBA’s Lowe commented saying the Australian economy has a better chance over most developed countries of a softer landing post-recession citing better wage growth. We still see upside momentum continuing for the Aussie over the week.
Current Level: 0.6652
Resistance: 0.6900
Support: 0.6580
Last Weeks Range: 0.6583-0.6779
The New Zealand Dollar (NZD) gave back last week’s gains Monday sliding to 0.5940 (1.6840) levels in early Tuesday trading after being at 0.6040 (1.6560) late last week. Risk conditions slumped as China covid lockdown protesting spooked markets. With a lack of data publishing of late it’s hard to determine proper direction in the cross with the greenback dictating big picture moves. This week’s Eurozone inflation estimates may give us further clues with predictions the y/y figure should stay above 10.0% forcing the ECB to hike big at their mid Dec meeting. Downside risks in the pair remain.
Current Level: 0.5958 (1.6784)
Resistance: 0.6030 (1.7000)
Support: 0.5880 (1.6580)
Last Weeks Range: 0.5946-0.6037 (1.6563-1.6817)
The English Pound (GBP), New Zealand Dollar (NZD) remains range bound heading into Tuesday reaching 0.5140 (1.9450) Monday before settling around 0.5160 (1.9380). Recent PPI data was revised up by an average of 1.38% after an error was found assisting the GBP slightly together amid a risk off tone which has developed. ECB’s Bailey speaks this week as well as RBNZ’s Orr. We expect more of the same sideways action this week.
Current Level: 0.5152 (1.9410)
Resistance: 1.0920 (1.9600)
Support: 0.5100 (1.9160)
Last Weeks Range: 0.5150-0.5217 (1.9168-1.9414)
The New Zealand Dollar (NZD), Australian Dollar (AUD) is still holding firm around the 0.9260 (1.0787) zone heading into Tuesday with little reason to break out of this zone. NZ Retail Sales was down on expectations at 0.4% from 0.5% q/q weakening the kiwi slightly, overall, the cross seeks directional cues. The kiwi has done well post last week’s cash rate increase to 4.25% but we suspect the AUD may improve this week as the iron ore price continues to advance. Both central bank governors speak this week, the only standouts on the calendar.
Current Level: 0.9265 (1.0790)
Resistance: 0.9345 (1.0900)
Support: 0.9175 (1.0700)
Last Weeks Range: 0.9215-0.9337 (1.0710-1.0851)
The New Zealand Dollar (NZD) has come under pressure as we entered the week, off the back of broad-based risk off tone and heavy buying of the US Dollar (USD) as a result. The cross fell to 0.6160 early Tuesday after posting a fresh high off 0.6290 Thursday. Fears are that the recent rally from 0.5500 levels mid-October may have stalled out developing fresh downside momentum. We would need to see a break below 0.6050 before a decent signal is displayed on the chart. A busy US calendar should keep the pair active over the week with Non-Farm Payroll Friday the key release.
Current Level: 0.6164
Resistance: 0.6450
Support: 0.6080
Last Weeks Range: 0.6085-0.6289
Market Overview
Key Points:
• Covid lockdown protests across China created “risk off” flows early in the week as the unrest continues
• ECB’s Knot has been on the wires suggesting a Eurozone recession is not a foregone conclusion
• Crude Oil drops to 74.00 down 3% on the day, China headlines the catalyst
• RBNZ’s Silk says a NZ recession will be “shallow and technical” with spending data and CPI to determine their next move when they meet on February 22nd
• The Central Bank of China (PBOC) cut their RRR – reserve requirement ratio by 25 basis points taking effect from 5th December. This is the cash banks need to keep in reserve and should stimulate the economy
• The British Pound (GBP) was the strongest currency last week while the Australian Dollar (AUD) was the worst performer. Read more
Monday 28/11
12pm, AUD, RBA Gov Lowe Speaks
Wednesday 30/11
2:30am, CAD, GDP m/m
Forecast: 0.10%
Previous: 0.10%
4am, GBP, BOE Gov Bailey Speaks
4am, USD, CB Consumer Confidence
Forecast: 100
Previous: 102.5
Thursday 01/12
2:15am, USD, ADP Non-Farm Employment Change
Forecast: 200K
Previous: 239K
2:30am, USD, Prelim GDP q/q
Forecast: 2.80%
Previous: 2.60%
4am, USD, JOLTS Job Openings
Forecast: 10.36M
Previous: 10.72M
7:30am, USD, Fed Chair Powell Speaks
8:30pm, CHF, CPI m/m
Forecast: 0.10%
Previous: 0.10%
Friday 02/12
2:30am, USD, Core PCE Price Index m/m
Forecast: 0.30%
Previous: 0.50%
4am, USD, ISM Manufacturing PMI
Forecast: 49.8
Previous: 50.2
3:40pm, AUD, RBA Gov Lowe Speaks
5:40pm, NZD, RBNZ Gov Orr Speaks
Saturday 03/12
2:30am, CAD, Employment Change
Forecast: 10.5K
Previous: 108.3K
2:30am, CAD, Unemployment Rate
Forecast: 5.30%
Previous: 5.20%
2:30am, USD, Average Hourly Earnings
Forecast: 0.30%
Previous: 0.40%
2:30am, USD, Non Farm Employment Change
Forecast: 200K
Previous: 261K
2:30am, USD, Unemployment Rate
Forecast: 3.70%
Previous: 3.70%