Once again it seems the weather is to blame, this time it’s in the land down under. Shocking employment data out overnight in Australia has seen the little battler hit downside levels not seen for nearly 4 years and if you believe what the street has to say, there’s more to come yet. I jest about the weather of course but perhaps it’s just a case of it being too hot to stay at work or even bother going to look for any as the participation rate falls rapidly and full time jobs fall by the wayside. All in all the AUDUSD got hammered on the release and still trades heavy as Stevens’ target of 0.8500 for the local currency comes in to even closer view. Talk of option barriers at 0.8750 will keep the AUD pinned with interest looking to trigger those very barriers. The only bright spark for the cross was talk this morning of buyers of 0.8950 strikes (a vol play) paying up in size (over $500mio) in short term tenors.
Elsewhere in the overnight session it was all relatively quiet outside of the US Beige book release which saw a small upside improvement in sentiment and activity across most sectors. This for the time being will be enough to give USD bulls a little more courage in their single minded determination to own the Greenback.
On the day we have US weekly claims and core CPI to look forward to later this afternoon and a rather listless market until then and most likely also afterwards.
As far as levels on the day are concerned;
EURUSD: The 200 hour moving average sits at 1.3626/7 and for now has proven to be resistance with talk of intraday stops layered above the 1.3630/35 area ripe for the picking. On the downside similar to yesterday buyers lie in wait at the 1.3580 area.
GBPUSD: After middle eastern names picked the bones out of Betty yesterday selling through 1.6375 and taking profit at 1.6315/20 we’re basically confined to those very same levels on the day. Loose chatter of stops through 1.6300 and more into 1.6280 are doing the rounds though.
AUDUSD: As stated above, 0.8750 will prove to be the closest point of interest while there is little to speak of by way of topside stops for now. One could imagine that real money would be on the wide, and trail their stops into 0.8850 or close if they’re keeping things tight.
Helmets on and good luck out there today.