Over 40 years’ heritage
185,800 clients worldwide
Over 15,000 markets

China PMI puts risk back in focus

Four markets in focus today: AUD/USD, EUR/USD, Atlas Iron and Telstra.

AUD/USD

The pair found some support in the 0.92 region yesterday and managed to recover some ground. Today will be another big test for the currency with China’s HSBC flash manufacturing PMI due out at 11.45am (AEST). The reading is expected to show an improvement to 48.4 from 48.1. However, judging from the recent performance in China, I wouldn’t be surprised to see yet another disappointment. Selling into strength might be the preferred strategy with resistance in the 0.93 region.

EUR/USD

The single currency just continues to languish and will be in the spotlight again today with a raft of economic releases due out of the region. EUR/USD has been sidelined most of the week and is just under 1.37 at the moment. Later today we have manufacturing and services PMIs for France, Germany and the region of which we need to see some strong numbers to prevent a further slide. Additionally the European parliamentary elections commence today and these are likely to cap any euro gains in the short term.

Atlas Iron

AGO has been beaten down quite significantly recently with pure plays taking a beating on falling iron ore prices. However, yesterday’s bounce in iron ore could spark a relief rally in AGO. Investors will be look to bargain hunt in the sector and this is likely to present some opportunities. From a trading perspective though, the rally might be short lived and therefore taking profits early might not be a bad idea.

Telstra

While local equities have mostly been struggling and retreating over the past few weeks, TLS has continued to push higher. The stock broke to a fresh nine year high of $5.36 yesterday and a solid uptrend remains in place. Momentum traders could be looking to ride the stock higher while maintaining tight stops.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.