China in focus ahead of US payrolls

Five markets in focus today.


USD/CAD is trending beautifully and continues to make new highs. I am cognisant however of the fact we saw the pair print a higher high, but the RSI on the daily chart failed to print a higher high, thus negative divergence has been seen. This can indicate a pullback is on the cards. With the US payrolls on the cards at 00:30 AEDT tonight I would look to use pullbacks to 1.0750 as a buying opportunity, premised on a slightly weaker-than-forecast number. I would look to place a stop at 1.0585 and would look for a move to 1.10 and even 1.12 over the coming months.

Wall Street Cash

With US payrolls in firm focus, I could really have picked any asset to be in play. The market expects 197,000 jobs to be created (range of 250,000 to 100,000), with the unemployment rate expected to hold firm at 7%. Economists will be keen to look at other metrics like hours worked and hourly earnings as well. A number above 200,000 should be good for stocks, while we could see good strength in the USD and copper, while bonds and gold should find sellers.

China A50 cash

China takes centre focus in Asia today ahead of the US payrolls report, with its December trade balance firmly in focus at 13:00 AEDT. The market expects a narrowing in the deficit, although exports and imports are expected to gain 5%.  It’s hard to figure out a clear directional bias on the print, but it seems logical that price action in the Chinese market could dictate play in other asset classes like AUD/USD, copper and the ASX 200 in afternoon trade.


FOX have announced they plan to delist from the ASX 200, subject to approval from Class B voting stock holders. Delisting is expected to occur in April or May if passed, with approval needing more than 50% of the Class B voting stock. Rupert Murdoch can vote and he holds 39.6% of all stock. It seems logical to think the stock could see downside on open.


On the daily chart you can see clear indecision around the December 2 lows of 0.8252. The trend is lower and looking at the MACD on the daily chart momentum still favours selling rallies within the bearish trend. The ten-day RSI is starting to suggest some may take profits in the short-term, but I see the RSI level as a sign of the strength behind the selling, with any subsequent rallies contained to 0.8300 (the downtrend on the hourly chart). The ECB press conference overnight was noted for the stronger and more aggressive wording from Mario Draghi and from a purely fundamental basis the pair should go lower over the year. In European trade we get industrial production numbers in the UK, France and Holland.

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