Oil continued its rise

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» 10:30pm Unemployment Rate – CAD
» 10:30pm Average Hourly Earnings – USD
» 10:30pm Non-Farm Employment Change – USD 
» 10:30pm Unemployment Rate – USD

The BOE delivered on market expectations overnight with a rate cut to historic lows of .25%. Even though the cut was fully priced in it didn’t help the GBP/USD as it lost over 150 pips post release. Oil continued its rise adding another 70 cents after a very soft Asain session. European stocks had a very strong session backed by the rate cut from the BOE. The FTSE100 increased by 105.76 points in contrast, US stocks had a quiet night in trade. The S&P500 barely changed up by 0.02%.

RBA statement, there are current concerns over the AUD and China. They’re keeping the current direction for the GDP and CPI outlook. Japan’s real wages rose the most in 6 years but this figure is exaggerated by the effect of falling prices. The AUDUSD today has been in one way traffic, buyers have taken it past its .7640 resistance level. Local stocks have been flat and the JPY has been in a tug of war battle throughout the day. The JPN225 started strongly but has been struggling to hold it’s open. AUS200 has been very quiet but is still holding above its short term 5490 support level. The USD has mainly been weaker so far today. Tonight we have average hourly earnings, the non-farm payroll employment change, and unemployment figures coming out at 10:30pm AEST. The market is looking for 0.2 increase in earnings, 180K increase in the employment change and a slight decrease in unemployment to 4.8%. Any big misses in the employment change will cause USD and equity index volatility.

AUDUSD – Another very strong session so far today. We have seen a break out of the .7640 resistance point that goes back to the 24^th of June. We have one more clear resistance point to be tested at .7670. For the moment the current uptrend looks very strong. One thing to note, we have had a breakout and divergence is starting to build. No indication a turn is coming but it’s something to keep an eye on.

HKG33 – Testing highs closing highs today. A strong rally today has seen prices hit 22175 closing highs. This area lines up with a previous high set in December 2015. A break above 22285 reconfirms the current trends strength. A fail at this area could see a retest of the 21580 to 21320 area.

XAUUSD – Buyers have returned after yesterday’s short-term weakness. Yesterday’s reversal was a key in buyer commitment in the short term, but I still see 1367 – 1374 as levels that need to be closed above. 1374.88 has proven to be a turning point and holds significance. Step one in the short term is a move over the current short term resistance seen at 1363.55.

Good Trading.
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Written by Joseph Jeffriess, GO Markets Market Strategist