- NZD/USD is currently trading at 0.6563 from a low of 0.6502 and a high of 0.6565.
- NZD/USD has been able to track the Aussie and CAD higher on the back of improved risk sentiment following the NAFTA progress and potential talks between the US and China on the cards.
The Wall Street Journal printed an article that read,
“The Trump administration is reaching out to China for a new high-level round of trade talks, in an effort to give Beijing another opportunity to address U.S. concerns before it imposes new tariffs on Chinese imports, said people briefed on the matter”.
While that has been welcomed by the markets and used as a green light to sell the greenback, the downside ran out of steam. The DXY dropped to 94.74 from 95.28 but recovered back to 94.86 for the close in NY. Looking around, whoever, the market is not prepared to give the dollar back much ground. Another pair that grabbed the market’s attention was USD/CAD. That dropped below the 1.30 level and has struggled to find territory back above the level with bears looking for a test to 1.2950 – WTI bulls turned up to the party which has kept a lid on bullish attempts so far – WTI trades at $70.03 at the time of writing, down from $80.89 highs but up from the mid $67 handle due to storms in the Gulf of Mexico, Iran, production and EIA data.
Aussie steals the show
However, what really stole the show was the Aussie. The US 10-yrs were backing away from the 3% mark which was a catalyst for the greenback’s downside but given the proxy that Aussie is to China and emerging market-FX, what with a sharp rally in the Lira and CNH, AUD/USD made a high of 0.7182. AUD/USD closed at 0.7166 and crept lower into early Asia to 0.7162 – still up for the lows of 0.7085 (lowest since Feb 2016). However, bulls are not out of the woods yet, for either the Kiwi nor the Aussie – CAD can keep going so long as oil stays firm and NAFTA progresses fast before the month is out towards a deal. Today we have Aussie jobs data and tomorrow we have US CPI – big data movers.
Aussie jobs next major catalyst in commodity-FX
For the Aussie jobs, market is looking for 15.0K new jobs added in August after losing 3.9K in July. The unemployment rate is expected to remain unchanged at 5.3%, despite the participation rate is foreseen rising to 65.6%. As usual, the key will be on full-time employment, which could be disappointing according to seasonal stats, as August tends to be a weak month for employment.
AUD/USD levels
Valeria Bednarik, chief analyst at FXStreet explained that in the short-term, and according to the 4 hours chart, the risk is skewed to the upside, as the pair broke above its 20 SMA, now over 40 pips below the current level, while technical indicators head higher well above their midlines, with uneven strength:
“In the mentioned chart, the 100 and 200 SMA maintain strong bearish slopes above the current level, suggesting that the ongoing advance could end up being just a correction.”
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