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Caution is required on the long side of AUD/USD

Four key markets in focus today.

AUD/USD

The easy money has been made on the long side now and caution is required. From a pure technical perspective the pair has met the head and shoulders target and on an Elliott wave basis it has also met the target for the fifth wave sequence from August 5. Today’s China property prices (out at 12:30) and US non-farm payrolls are likely the key drivers today.

EUR/USD

EUR/USD rallied just shy of the year’s high on Friday and on the daily chart (using candlesticks) shows a ‘doji’ pattern has been printed. A doji pattern is where the open and close are virtually the same, and from a pure price action perspective shows indecision in the market. This tells me that the trend we have been seeing could be coming to an end. The US non-farm payrolls (released 23:30) is the key event with expectations of 180,000 jobs to be created. While this is September data and thus backward-looking, a number above 200,000 could still push the pair lower.

Apple

The US tech giant has now rallied for nine consecutive days, recording an 8.5% gain in the process. This is the longest winning streak for the company since October 2010, when it subsequently fell 2.3% over the next five days. The stock looks good technically and will be eyeing $582 (the 61.8% retracement of the $705 to $385 sell-off) over the coming weeks. Apple should reveal a thinner iPad in upcoming US trade, while traders and analysts will be keen to look out for earnings on October 28.

David Jones (DJS)

The retailer has rallied over 20%, but has run into supply of late at $3.00. After market yesterday the company advised that it’s CEO and Managing Director Paul Zahra is resigning for personal reasons. A succession process has begun, although it could take some time. Fundamentally DJS looks expensive on moves to $3.00 and is trading on the highest price-to-earnings multiple in the discretionary space.

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