Resurgence of the greenback

Being non-farm payrolls week, naturally the greenback will be in focus and it just seems to be gearing up for some renewed strength in the near term.

Commodities are already feeling the pinch it seems and this is hurting related currencies such as the AUD. In fact AUD/USD has dropped significantly, falling back below 0.7800 and looking like it is poised for further losses. The pair is now testing 0.7700 and last traded this low on March 20. Politicians have stepped up budget rhetoric and this also seems to be having a negative impact on the AUD. This makes this week’s trade balance data very important as we’ve been hearing quite a lot of negative chatter around declining terms of trade. A wider trade deficit is envisaged and this will give a clearer picture of what falling iron ore prices mean for us. This will also result in interest rate cut timing repricing and with key commodities falling heavily along with declining activity from China, many are betting on the AUD going lower. The 61.8% retracement of the rise from March lows to March highs near 0.7940 comes in at 0.7700 and I feel a close below this level could trigger the case for fresh shorts.

Click to enlarge

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.