September 6 2021
Fridays big miss for August’s NFP seems to have confirmed what we probably already knew, that the US Federal Reserve will be in no hurry to taper, or raise US Interest rates. However, it may not be just the Fed who is showing some caution on a stuttering economic recovery, as covid delta continues to unsettle policy makers. This weeks RBA and ECB meetings are likely to share the same concerns about the prospects of continued economic recovery as the FOMC.
The poor NFP number sent an already resurgent EUR to test resistance at 1.1900, which has been the top end of our recent trading range. A clear break above 1.1900 will likely see further progress towards 1.1960 and possibly 1.2000.
However, the EUR looks a little overbought and we may see a correction or at least some consolidation of recent gains. Support will be found first at 1.1840 and if broken the next level of support is at 1.1790/80
Having traded back above our 1.3800 pivot the outlook for the GBPUSD appears to be somewhat brighter. Although resistance remains at 1.3900 if broken then cable will likely advance to 1.3940 and possibly 1.3980 in extension.
Strong support for the GBP will be found at 1.3800/1.3780. However if pivot support here gives way, I would expect a deeper correction back down to 1.3720/1.3700 before attempting another run higher.
The AUD has made a recovery bouncing off lows close to 0.7100. The AUDUSD surprised many by breaking above 0.7420 resistance on weak US data. This was despite much of Australia being locked down by a seemingly inappropriate covid zero policy and an inadequate vaccination program. Not to mention continued simmering tensions with China their big trading partner.
As far as I can see the AUD is now somewhat over bought and a correction back towards 0.7320 would not be a surprise. Resistance is found at 0.7480 and if broken the Ozzie could make it to 0.7530.
Initial support is going to be found at 0.7420/0.7400 and if broken here i would expect to see further losses towards 0.7300.
Good Luck trading this week and if you trade the AUD, watch out for tomorrow’s RBA meeting. You can contact us at email@example.com