Daily currency market report

DAILY CURRENCY MARKET REPORT 5TH MAY 2015

AUDUSD: The Australian Dollar, as with all major currencies, started the week off slowly.This was initially due to Japanese holiday, but also as we look towards other importanteconomic events that are due to come over the week. We start off with our Trade Balance numbers and then the RBA Meet this afternoon, at which the majority ofthe market expects an interest rate cut. However thoughts are that this will be the last in the cycle and the downside may be limited. On the charts we remainat yesterdays “fair value”, being the 50% with suggested orders to be placed 100 points either side so as to take advantage of the expected volatility. We may not have a clear direction until next week.

AUDEUR: A mixed set of Manufacturing data releases from the main centres around Europe, along with no real supportive comments out of the Greek debt talks saw this pair reclaim some small ground. The focus for this evening is on Spanish Unemployment and the European Commission’s economic growth forecasts. There is no major data set to come for the rest of the week here, so direction will be determined by domestic and Chinese data. On the charts our medium term target sits 150 points below and resistance 200 points above, on any surprise from the RBA or a breakdown inthe Greek debt talks.

AUDGBP: The Australian Dollar started the day on the back foot and pushed back towards the lows seen latelast week. However the UK May Day bank holiday ensured there was no volume to maintain the momentum and the losses were soon erased. Construction data is set to come this evening, but regardless of the outcome the market will largely ignore it as we are only 2 days out from the closest election in memory. On thecharts our pennant formation continues to bring higher lows and lower highs, therefore signalling an explosive move is imminent. We could easily be 100/200points in either direction by Friday.

AUDNZD: Another flat day and tight range for this pair as we await direction for the RBA and important NZ centriceconomic data over the next 24 hours. NZ Dairy prices are due this evening, NZ unemployment numbers in the morning and followed by Fonterra’s milk solid auction.We may see a dip with a RBA cut this afternoon, although generally we remain in the uptrend and target the 50% retracement of the 6 month long sell off thatsits 250 points above. The temporary support level, especially should the RBA go sits 1.5 cents below.

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