Robust Australian GDP ahead of EU GDP amp US ADP Jobs Data

The FX markets continue to trade with a ‘risk on’ perspective following new highs seen in the Dow Jones yesterday whilst the Nikkei closed up a solid 2.1% earlier today.

The main  release overnight was the Australian GDP data which showed a robust quarter on quarter reading of 0.6% with the year on year number beating expectations at 3.1% versus the expected 3%. I will note that Australia continues to be  reliant on China as the breakdown of the data shows outperforming growth coming from Western Australia and the mining sector which makes sense with the Chinese economy seemingly back on track.

The AUD traded briefly above 1.0300 but couldn’t sustain the level as we continue to trade the broader range of 1.0150-1.0350. There was not much action in the rest of the FX space as EURO and GBP consolidate on the 1.3000 and 1.5100 handles respectively as we await the ECB and BoE meetings tomorrow.

Looking at today’s data releases, the EU GDP data will be this morning’s highlight with the US session bringing us a clue to the US jobs report on Friday in the form of the ADP report. The Beige book this evening will likely also give us some guidance on the latest thinking on the US economy. The Bank Of Canada policy rate announcement is due this afternoon and although rates are widely expected to be unchanged at 1%, the market will be looking for clues on the economy and the prospect of a tightening policy in the future.

EUR/USD

Supports 1.3010-1.2975-1.2875 | Resistance 1.3110-1.3150-1.3200

USD/JPY

Supports 93.00-92.30-92.00 | Resistance 93.80-94.30-95.00

GBP/USD

Supports  1.5065-1.5010-1.4980 | Resistance 1.5185-1.5230-1.5270