JPY

German inflation remains stubbornly high, despite flagging economic activity, in the economy. Germany is in danger of a potential de-industrialisation, which can only harm the Eurozone, as a whole. The ECB has acted conservatively in their interest rate policy, but they may be forced to act ‘further and longer’ with rate rises. Inflation had been falling steadily in many EU Countries, but those precipitous falls, appear to have been arrested, with inflation rises in Germany, France and elsewhere in the Zone. The cross rate is likely to suffer accordingly.

Current Level: .5975
Support: .5925
Resistance: .6010
Last week’s range: .5955 – .5995

The ECB Chair, LeGarde, warned of continued inflationary pressures and further rate rises at the Jackson Hole Symposium. The floundering economic situation in the Eurozone remains dire, especially in the ‘engine-room’, that was Germany. German Industrial/Manufacturing Production has been under severe pressure, from extremely elevated energy costs, with warnings that Government subsidies may be coming to an end. Flagging global demand for exports and a precipitous collapse in imports, are revealing a possible structural crisis. The prospects of further interest rate rise, supporting the EUR and the cross rate, will probably mean more downward pressures.

Current Level: .5501
Support: .5420
Resistance: .5525
Last week’s range: .5455 – .5510

Market Overview:

Key Points:

• Non-Farm Payrolls
• EU/US Inflation
• China/German/US/Australia/US Trade Data
• RBA/Bank of Canada Rate Decisions
• Jackson Hole Symposium/BRICS Summit

The Australian Dollar (AUD) held firm around the 0.6425 area post the open against the USD Dollar (USD) Monday as equity markets traded positive. It’s hard to know if we will see a reversal of sorts this week and a push higher, but with improved sentiment in China after an improved May manufacturing PMI read who knows. Australian Retail Sales came in hot at 0.5% in July after a poor June release surprising analysts as shoppers came out during the FIFA Women’s World Cup. Despite this the RBA is still likely to raise rates at the September 5 meeting. Looking ahead we have US Non-Farm Payroll Friday which will add volatility to the mix.

Current Level: 0.6432
Resistance: 0.6365
Support: 0.6500
Last Weeks Range: 0.6385 – 0.6488

No real moves early this week in the Euro (EUR), Australian Dollar (AUD) pair has price sitting around the 0.5940 (1.6830) area as we head into Tuesday. Aussie Retail Sales surprised with a 0.5% rise in July up on expectations of 0.2% and well above June’s -0.8%. A combination of dining out and the Women’s world cup football tournament impacting. The AUD may retest last week’s high of 0.5970 (1.6750) this week as Chinese pessimism improves and if equities remain buoyant.

Current Level: 1.6846
Resistance: 1.7065
Support: 1.6275
Last Weeks Range: 1.6751 – 1.7037

No real moves early this week in the Euro (EUR), Australian Dollar (AUD) pair has price sitting around the 0.5940 (1.6830) area as we head into Tuesday. Aussie Retail Sales surprised with a 0.5% rise in July up on expectations of 0.2% and well above June’s -0.8%. A combination of dining out and the Women’s world cup football tournament impacting. The AUD may retest last week’s high of 0.5970 (1.6750) this week as Chinese pessimism improves and if equities remain buoyant.

Current Level: 0.5936
Resistance: 0.6145
Support: 0.5860
Last Weeks Range: 0.5869 – 0.5969

The Australian Dollar (AUD), British Pound (GBP) has been unmoved since Wednesday sitting around the 0.5100 (1.9600) mark into early Tuesday sessions. Australian Retail Sales surprised at 0.5% vs 0.2% expected in July and up from -0.8% in June. Food and FIFA Women’s World Cup to blame for the unexpected rise in spending. Looking ahead we have the Australian monthly CPI forecast to print around 5.2% in July down from June’s 5.4%. The pair has crossed above the 100-day moving average this morning signalling we may see a little more AUD strength to come.

Current Level: 1.9623
Resistance: 2.0000
Support: 1.9350
Last Weeks Range: 1.9581 – 1.9929

The Australian Dollar (AUD), British Pound (GBP) has been unmoved since Wednesday sitting around the 0.5100 (1.9600) mark into early Tuesday sessions. Australian Retail Sales surprised at 0.5% vs 0.2% expected in July and up from -0.8% in June. Food and FIFA Women’s World Cup to blame for the unexpected rise in spending. Looking ahead we have the Australian monthly CPI forecast to print around 5.2% in July down from June’s 5.4%. The pair has crossed above the 100-day moving average this morning signalling we may see a little more AUD strength to come.

Current Level: 0.5096
Resistance: 0.5165
Support: 0.5000
Last Weeks Range: 0.5017 – 0.5107

Early week moves in the Euro (EUR), New Zealand Dollar (NZD) to 0.5465 (1.8300) from the weekly at 0.5480 (1.8250) had the kiwi immediately on the backfoot in a thin week of economic Data. I’m not sure we will see a retest of the low at 0.5425 (1.8430) but we could get close if German prelim CPI y/y comes in below expectations tomorrow. With hikes on the horizon for the Eurozone a poor read could certainly pressure the ECB to tighten policy further at their Sep 15 meeting, this in turn won’t be inspiring for the kiwi.

Current Level: 1.8331
Resistance: 1.8470
Support: 1.8150
Last Weeks Range: 1.8151 – 1.8460

Early week moves in the Euro (EUR), New Zealand Dollar (NZD) to 0.5465 (1.8300) from the weekly at 0.5480 (1.8250) had the kiwi immediately on the backfoot in a thin week of economic Data. I’m not sure we will see a retest of the low at 0.5425 (1.8430) but we could get close if German prelim CPI y/y comes in below expectations tomorrow. With hikes on the horizon for the Eurozone a poor read could certainly pressure the ECB to tighten policy further at their Sep 15 meeting, this in turn won’t be inspiring for the kiwi.

Current Level: 0.5455
Resistance: 0.5510
Support: 0.5415
Last Weeks Range: 0.5417 – 0.5509