MARKET BRIEFING – LONDON OPEN 12.11.2015
Overnight news from Australia propelled the Aussie Dollar higher. The 90 pip rise in AUDUSD was due to a set of very strong employment numbers.
The strength of the incoming data has resulted in the Australian Dollar reaching the upper level of today’s expected true range at the 0.7135 level.
This price level coincides with strong overhead resistance that is formed by a prior, multi-decade broken uptrend line.
With the price action consolidating between strong overhead resistance and the 0.7135 level, it could be expected that AUDUSD trends down to sideways in a corrective fashion.
This morning’s news release from the Australian Bureau of Statistics included the Employment Change and Unemployment Rate numbers.
The Employment Change release measures the change in the numbers those employed during the previous month.
The prior release was negative -0.8K and the market expected to see a slight improvement to 14.8K. However, the actual release smashed estimates by posting a hefty 58.6K.
The Unemployment Rate continued to fall and now stands below the 6% level. The market had expected to see a release of 6.2% which would have meant it was in line with the prior months data. However, the actual number beat predictions and was reported as 5.9%.
The creation of employment is an extremely important leading indicator as the salaries are a driver for consumer spending.
As consumer spending is by far the largest component of all economic activity, signs that a positive trend exists in labour creation can be used as a barometer that measures the health of the economy.
What happens in Australia also has wider implications for the global economy. The Australian economy is tied closely to the fortunes of China. This is due to the high volume of exports, especially of commodities that Australia sends to China.
Therefore, a pick up in the Australian economy could be used as a leading indicator to what happens in the world’s second-largest economy.
Furthermore, with both the United States Federal Reserve Chairwoman, Janet Yellen and the Bank of England Governor Mark Carney identifying external risks as a reason to hold back on interest rate increases, the news that one of the world’s largest commodity exporting nations is experiencing improving economic conditions will not go unnoticed.
EURUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.0830
Target 2: 1.0650
Projected range in ATR’s: 0.0092
Daily control level: 1.0704
GBPUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.5300
Target 2: 1.5100
Projected range in ATR’s: 0.0103
Daily control level: 1.5090
USDJPY
The intraday technical outlook
Trend 1 hour: Down
Target 1: 123.60
Target 2: 122.00
Projected range in ATR’s: 0.77
Daily control level: 123.43
USDCHF
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.0115
Target 2: 0.9970
Projected range in ATR’s: 0.0073
Daily control level: 1.0018
USDCAD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.3350
Target 2: 1.3165
Projected range in ATR’s: 0.0097
Daily control level: 1.3295
AUDUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 0.7135
Target 2: 0.6985
Projected range in ATR’s: 0.0076
Daily control level: 0.7014
GOLD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1099.00
Target 2: 1072.00
Projected range in ATR’s: 13.67
Daily control level: 1096.00
OIL
The intraday technical outlook
Trend 1 hour: Down
Target 1: 46.50
Target 2: 42.50
Projected range in ATR’s: 1.55
Daily control level: 45.25
MORE ON ACFXblog.com