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Huge amount of data to move AUD/USD today

Five key markets in focus today.

AUD/USD

The AUD is the main game in town today, with a huge amount of data for traders to sift through. On the billing we have the current account balance (including net exports) and building approvals (expected to be down 24%), with these variables feeding into tomorrow’s Q4 GDP report. At 14:30 AEDT we get the RBA cash rate and more importantly, the statement. The market is very neutral on future rate expectations, however after the recent weaker-than-expected capex intensions, perhaps the RBA could verge on the dovish side today.

Spot gold

Naturally we’ve seen good buying of gold as traders hedge geo-political risks; they will be keen to see if the spot level can test the downtrend drawn from the October 2012 high at $1363. Momentum clearly favours a test of this level in the short term, with the five-day moving average pulling away from the ten-day and the MACD on the daily chart firmly above zero. If long, traders will most likely stay long.

Brent (April)

Volatility picked up in the energy complex and we saw that in the price action of oil-related stocks yesterday, with solid gains seen in names like OSH and STO. April brent traded in a range of $112.39 to $109.29 yesterday, but failed to hold the intraday highs and sellers came in fairly aggressively. The bulls will want to see a break and close above the December 4 high of $113.00. Negative divergence between price and the RSI was seen on the daily chart.

Volatility index (April)

Traders bought put (option) protection yesterday to hedge portfolio risks given the tensions in the Ukraine. The index rallied around 15% overnight and is now at the highest levels seen in October. This index is the one to watch and any moves will affect other asset classes with carry trades likely to suffer, given this strategy works well in times of low volatility.

Qantas (QAN)

Joe Hockey told the market he won’t provide QAN with a debt guarantee plan, although he will seek to amend part of the sale act. QAN’s US listing fell 5.6%, although this listing is less liquid and thus prone to more aggressive moves.

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