AUD in freefall as we look to ECB Thursday

<p>AUD took centre stage in the FX space overnight following another disappointing session for equities after the US market closed down over 200 points. The […]</p>

AUD took centre stage in the FX space overnight following another disappointing session for equities after the US market closed down over 200 points. The lifestyle currency saw fresh lows overnight as stops and option barriers were triggered through the much touted 0.9500 level. The catalyst for the move comes from a Nikkei opening up below 13,000, with AUD/JPY selling noted as Australia’s trade surplus came in weaker than expected at AUD28mn. My sources are, however, note that huge barriers reside in the 0.9380-0.9400 region and will be vigorously defended.

Note the Nikkei has now reversed all the gains it had made since BoJ day on the 4th of April where aggressive stimulus measured were announced in the new era of Abeconomics.

The dollar is trading with a softer tone across the rest of the G10 space ahead of the US jobs data tomorrow as the market continues to focus on the FED tapering debate with the dollar bulls sitting very nervously after yesterday’s poor ADP report following on from Monday’s dismal ISM data.

Today is all about the BoE and ECB meetings, with this being BoE Governor King’s last meeting with Mark Carney taking the reins as of next month. I note a US investment house now expects no further QE from the BoE following some stronger UK data releases of late notably the stronger PMI data this week. Personally I feel the arrival of Carney will bring the UK a FED style policy which will target certain aspects of the economy, notably unemployment. Like the BoE meeting today I expect no change in policy from the ECB with the attention being on Draghi’s words at 1.30pm and updated economic forecasts and any discussions on the negative rates debate.



Supports 1.3040-1.2940-1.2840 | Resistance 1.3145-1.3200-1.3240


Supports 98.00-97.30-97.00 | Resistance 99.50-100.00-100.45


Supports 1.5380-1.5335-1.5275  | Resistance 1.5435-1.5485-1.5500

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.