Traders watching gold's bearish reversal

Four key markets in focus today.

Spot gold

Gold printed a bearish reversal and traders will now be eyeing the recent low of $1269. It’s interesting as we saw only a modest rally in USD/JPY, while long-end bonds didn’t even move. Expect weakness in gold names today.

AUD/USD 

I suggested being short AUD/USD on Tuesday on rallies to 0.9310 and continue to hold these positions. I am taking profits on my short AUD/CAD trade at market (trading at 1.0167 at the time of writing) to reduce some of my short AUD exposure, as I am also long EUR/AUD

At 11:30 today we get the April employment report and the consensus is that we will see 8800 jobs created, while the unemployment rate is widely expected to tick up to 5.9% (from 5.8%). As always the quality of the result is key here, with the market focusing on the mix of part-time and full-time jobs.

EUR/JPY

For some reason the simple 120-day moving average (now at 141.08) has acted as major support for the pair for the last two years and it seems this average is key for technical traders. Certainly those who are long would prefer the BoJ to be hinting at further easing, however this is not the case and traders need to continue hoping the EUR will appreciate. The EUR now takes centre stage, with the ECB meeting at 21:45 and then Mario Draghi’s press conference at 22:30 (AEST). The conviction trade is that we see the ECB president hint at easing, but fail to actually provide anything new. If we are going to see cuts to rates or anything classified as monetary easing, then it will come in the June meeting, when the ECB also updates its economic forecasts.

Twenty-first Century Fox (FOX) – The media giant has announced good earnings in the US post-market. Q3 EPS of 47 cents easily beat expectations of 35 cents, while revenue of $8.22 billion, and also came out better than forecast. Expect a good day’s trade today in its Australian listing.

High grade copper

China’s trade balance will be the key release during the Asian session, although Australian employment will potentially throw up volatility targeted at the AUD and Australian consumer stocks. The market expects an increase in the surplus, although this isn’t necessarily a good thing as both exports and imports are anticipated to decline. Chinese exports are notorious for missing expectations, but as things stand the market expects a 2.3% decline in April.

 

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