Australian Dollar And Chinese Growth Figures Come To The Fore

by Phil Moore September 4, 2013

Last week most major US Indices moved to new highs, despite the disappointing NFP figures delivered to markets on Friday. Markets its seems have discounted the Fed tapering off QE3 in the near term, which has supported stock gains, whilst simultaneously reigning in the dollar.

It is likely that last Fridays momentum will continue into the start of the new week. Given the lack of major data for release this week, global markets could easily test new highs. With this backdrop, individuals trading with binary options should look broady higher this week.

At the same time currencies around the globe could also increase against the dollar. This is a continuation of trends set towards the end of last week. We would however see this as more of a shorter term move.

Key data due for release over the course of the week centres on the Australian dollar. On Tuesday the rate decision is announced while figures for unemployment change are due in on Wednesday. Having fallen strongly against the US dollar in recent sessions, traders of the Aussie will be looking for any sign of good economic news to provide some respite.

Wider markets will also be on the lookout for signs of a continuing slowdown in the Chinese economy. Wednesday sees the release of the year on year Chinese CPI figures. While markets have long anticipated a slowdown in the growth of the world’s second largest economy, the extent of this will be keenly watched for wider signs of an impending Asian slowdown.

Key News This Week

In Focus

EUR/USD - The Euro is continuing to move higher and increasingly likely to pullback. Yet again the pair failed to hold above 1.3300 on a close. This level looks to provide a good position to position for moves lower.

Currency Majors

EUR/USD - See Above

USD/JPY - The pair managed to grind higher last week with the Japanese elections adding some weakness to the Yen. The pair has struggled to hold above parity and the fundamentals currently point to more short term losses. A binary options contract to profit from a move lower over the week could yield profits.

USD/CHF - Having advanced as high as 0.9390 the pair has fallen back finding support at 0.92275. Look higher from this level over the coming trading sessions.

GBP/USD - Moving sharply higher at the end of last week, the pair has benefited from the dollar’s weakness rather than any strength in the Pound. Technically towards the 1.5400 level should provide a second opportunity to go short.

Major Indices

DOW - The Dows impressive run has continued, with 15400 now looking to be a solid base for further gains to be posted. Expect to see a pullback to this level at least this week to consolidate current gains. However ultimately look long for a run towards 16,000.

NASDAQ - New highs for the tech index with the market breaking strongly above the 3600 level. 3700 looks to be the next target which could possibly be taken out this week. 3600 now acts as strong support to any near term pullbacks.

FTSE - With further gains posted by the market last week, it looks like the major UK index is going to retest recent highs. Closing above the 6600 level last week, expectations are for additional gains this week, with a break of 6700 likely signalling a test of the high.

Commodities

Oil – After recent strong gains it was perhaps no surprise to see the price pullback.. at least temporarily. Oil seems to have found good support above the $100 per barrel level. A break of $102 to the downside or $110 above will dictate the next strong move.

Gold – The gold price fell back after failing to maintain above $1340 resistance. The subsequent fall back below the $1300 level gives the metal a bearish tone. We’d stay short while below this level.