AUDJPY- Bouncing off 82.00?

AUDJPY- Bouncing off 82.00?

Chart Of The Day

The Australian Employment report last night was a game changer. The final print of 60.9K jobs was a whopping three times the market estimate. Better yet full-time employment exploded at 74K rate indicating that the Australian labor markets remain robust. The news clearly puts the RBA into a neutral state and perhaps even leaves the door open to a tightening bias if labor demand continues at this pace.

Meanwhile, the dollar took a beating on comments from President Trump, who stated his preference for a lower dollar and lower rates. But the move was emotionally driven and USDJPY is now so deeply oversold that it is due for a bounce. All of which provide a good foundation for a rally in AUDJPY as the pair finds strong support at the 82.00 level and could see a rebound towards 84.00 over the next few days.

EUR/GBP – Will 8200 Hold or Break?

EUR/GBP – Will 8200 Hold or Break?

Chart Of The Day

Fundamentals

Despite highly divergent economic conditions the EUR/GBP pair has been at a standstill as traders were cautious to bid up the pound too much while at the same time unwilling to sell eurp. The state of equilibrium is due to opposite expectations even as economic data continues to confirm UK superior growth. In UK the market remains doubtful that the BoE will move to hike interest rates anytime soon despite the healthy 3% GDP growth. In EZ the opposite sentiment dominates. Markets are skeptical the the ECB will move to lower rates despite persistent deflationary threat. Tonight however the data could change those long held views. On the Uk side we have preliminary GDP report and if it prints stronger than the 0.9% eyed the pressure in the BoE will increased markedly. Similarly in Germany the CPI readings are expected to contract to -0.1% from 0.3% the month prior leaving little room for ECB to delay action. If both of those data points come in as expected EUR/GBP could finally move lower.

Technicals

On a technical basis, EUR/GBP has strong triple bottom support at 8200 but a break of the 8150 level could open the path to a move towards the key 8000 figure. Meanwhile upside looks contained by the 8250-8300 range.

EUR/GBP – 8300 or 8200?

EUR/GBP – 8300 or 8200?

Chart Of The Day

Fundamentals

The EUR/GBP cross finds itself in a tug of war between cable bulls who think that UK will be the first to hike rates and euro bulls who think that the continent is on the verge of recovery aided by surging German economy. Today we have two pieces of data that could potentially move the market as traders focus first of the German GFK consumer sentiment data and then on the 2nd revision of UK GDP. Although neither data set is markedly important and combination of positive or negative surprises could move the cross in either direction. With German economy continuing to perform well the prospect of a stronger GFK reading is possible. On the other hand the weather related impact could have some negative surprises in store for UK GDP and that could push the cross towards the 8300 figure. If both data sets come in as expected however, EUR/GBP could continue to tread water.

Technicals

EUR/GBP remains in a very tight volatility range with 8200-8300 range continuing to contain all the price action. A break above open a run to 8500 while a break below creates the conditions for another test of 8140 lows.