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AUD back in focus ahead of jobs numbers

Four key markets in focus today: AUD/NZD, spot gold, EUR/USD and Rio Tinto.

AUD
Source: Bloomberg

AUD/NZD

The NZD has been under pressure against most of the majors this week, with falling dairy prices and benign jobs numbers keeping the kiwi subdued. AUD/NZD has taken a leg up as a result and is now testing the 50% retracement of the November to January slide in the 1.1037 region. The pair is likely to consolidate at that level ahead of local jobs numbers today. Employment data is out at 11.30 AEST with the market expecting 13,200 jobs added and for unemployment to remain steady at 6%. A beat or a miss could result in a swing from that 50% retracement and will determine whether this will trigger a pullback or breakout.

Spot Gold

The precious metal is on the move yet again as geopolitical risk picks up on the Russia/Ukraine front. This has seen gold pop back above 1300/oz and could lead to further near-term gains. The pullback in the USD has also played into the hands of gold and will remain in focus heading into unemployment claims data later today.

EUR/USD

While the pair enjoyed a slight bounce on USD weakness, there is still plenty of negative rhetoric on the EUR side of the equation. The pair is now pushing back into 1.3400 ahead of the ECB meeting later today. I feel the EUR fundamentals are still a concern and traders are likely to use the recent strength as an opportunity to sell. While European equities struggled on disappointing data, the euro actually gained ground and I feel it could be looking to play catch-up at some stage. Additionally the retaliation measures being taken by Russia won’t bode well for the single currency.

Rio Tinto

The miner’s shares have remained firm heading into its half-year results and will be a key stock to watch today. RIO has been on the mend for a while and this has seen its share price rally from around $57.50 in June to now be trading above $65. Needless to say the market is expecting to see a strong performance with iron ore production driving earnings. The recent production report was well received and we are likely to see further buying today with the result set to be released just after market close.

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