Global Macro

The US Dollar ended last week mixed as Friday’s Retails Sales and Inflation data disappointed to the downside. This saw the Greenback offered across the G-7 pairs at the NY open. However, the unexpected drop of .1% in consumer spending along with the -.4% reading in the Producer Price Index were shaken off by the NY close setting up some interesting chart patterns as we start the new week.  

The AUD/USD, in particular, looks vulnerable to further downside range extension. After posting a .7755 high on Thursday, the AUD/USD finished the week with two consecutive losses for the fist time in almost two months and the first close below the five-day moving average since July 25th. Technically, the pair has been in a strong uptrend over the last three weeks but the RSI, along with the MACDs, are looking stretched.  

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With Tuesday’s RBA minutes likely to include a warning about the risks of currency appreciation derailing the sluggish post-mining economic recovery, a break of the key support level at .7630 is a reasonable bet. Further, the preliminary forecasts for Thursday’s Australian Employment report are looking for a softer reading in the key metrics in what has become a volatile data series.

Author: Leon Hinde

Leon has been working in the financial services industry for 18 years in management and advisory roles. Leon has extensive experience in general advice and dealings involving securities and derivative financial products.

PS 146 Securities & Derivatives, ADA 1 & 2 accreditation, Responsible Manager Certificate. Leon is authorised to provide financial product advice and deal with respect to the following financial products:

· Deposit Products
· Securities
· Derivatives
· Interest in managed investment schemes; and
· Government debentures, bonds and stocks