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GBP/AUD pushes through 1.90

Four key markets in focus this week.

GBP/AUD

The pair continued to rally and pushed through the 1.90 barrier to print a high of 1.919. This level saw some profit taking kick in on the pair and it has now dropped back to consolidate in the 1.90 region. With diverging fundamentals between Australia and the UK, chances are the uptrend will remain intact and we are likely to see traders use the dips as an opportunity to accumulate, particularly in the 1.90 region. Locally today we have NAB business confidence and the CB leading index is due out. Any further signs of pressure for the domestic economy could give the pair some upside in Asia. We also have China industrial profits data due out at 12.30pm AEDT today, which will carry significant weight after the China HSBC manufacturing PMI miss last week. Meanwhile out of the UK we have GDP data today. An above consensus reading could see the pound bid even higher.

Apple Inc

The tech giant reported its Q1 earnings today and saw its EPS come in well ahead of consensus. However, Q2 revenue forecasts are a concern and resulted in a sell-off in after-hours trade. This trend could continue in trade later today. Apple shares closed the session at around $550 only to slide to around $505 in after-hours trade. Given the round number psychological support in the $500 region, we could see bargain hunters emerge at this level.

Caterpillar

On the other side of the spectrum, earth moving equipment giant CAT reported earnings, which topped estimates. The recovery in the US building industry has seen CAT forecast earnings and revenue for 2014 above estimates. Its share price gapped higher and traded to around $92. Near-term resistance will be in the $93 region where it topped out on January 15.

Seven Group

The supplier of Caterpillar’s equipment will be in focus today after some solid figures from CAT overnight. SVW shares have been struggling and this could be the kicker it needs to get going. Improving prospects for CAT tend to be a positive indicator of things to come for SVW. 

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