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The pair has been consolidating around 0.9325, which is a key resistance zone for the pair as we’ve highlighted over the past few weeks. As a result, today’s jobs numbers will carry significant weight as traders look for some direction after the recent run. Analysts are expecting the unemployment rate to tick to a four-year high of 5.8% with 10,000 jobs added. We feel even if we just manage to meet these expectations then the AUD would continue to rally in the short term. This would see AUD/USD establish itself in a new trading range at higher levels possibly between 0.9350-0.95. Any falls on the back of the data will probably see traders buy the dips.
Ahead of the open we are calling the local market up 0.1% at 5240. This puts us very close to testing the year’s high at 5249.6. Our cash contract traded as high as 5250 in US trade before pulling back and this suggests any physical buying would push the local market higher today. The short-term uptrend is intact and it’s going to be all about jobs numbers today. There is a strong risk we might see profit taking accelerate at the year’s highs.
The pair has dropped back below 100 and is currently hanging at around 99.95. Today we have core machinery orders and weekly fund flows data to look out for. Any further outflows on the bond and shares front would result in further yen weakness. Near-term resistance is at yesterday’s highs at 100.61. On the USD side of the equation, the data also ramps up with unemployment claims due out and Fed member Dudley set to hit the wires. Any further tapering evidence will certainly push the USD higher and support the pair.
MYR reports its FY earnings today and investors will be looking for further evidence that we have seen a bottom in the retail sector. In the recent reporting season we saw some positive signs from the likes of JB Hi-fi and Harvey Norman, with focus mainly on outlook as opposed to the past year. Recent rate cuts also need to be given time to filter through the system. MYR shares have enjoyed a good run from $2.25 and are now approaching $3. Any positive forward guidance could see the stock trade through $3 in the near term.
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