AUD took heavy losses vs. its main currency rivals during yesterday's trading
session, falling a bigger than expected cut in Australian interest rates. The
AUD/USD fell over 100 pips following the news, reaching as low as 1.0304 during
early morning trading. The aussie also fell close to 100 pips against the JPY
and 145 pips against the euro. Turning to today, traders will want to focus on
the UK Construction PMI at 8:30 GMT, followed by the US ADP Non-Farm Employment
Change at 12:15 GMT. Any positive news could help both the British pound and US
dollar reverse their current bearish trends.
USD - US Manufacturing
PMI Gives USD Boost
EUR - EUR Stays Range
Bound During Slow Trading Day
Gold - Gold Reverses
Gains Following Positive US News
Crude Oil -
US Manufacturing Data Signals Increase in Oil Demand
Market Trends – 02 May 2012
USD - US Manufacturing PMI
Gives USD Boost
taking losses against most of its main currency rivals throughout the overnight
and morning sessions yesterday, the USD was able to stage a mild recovery
following a better than expected US ISM Manufacturing PMI. The news resulted in
a spike of over 30 pips for the USD/JPY, bringing the pair back above the
psychologically significant 80.00 level. Against the Swiss franc, the dollar
was able to move up over 50 pips reaching as high as 0.9087.
Turning to today, all eyes will likely be on the US ADP Non-Farm Employment
Change figure, scheduled to be released at 12:15 GMT. The ADP figure is
considered an accurate predictor of Friday's all important Non-Farm Payrolls
figure, and consistently leads to market volatility. At the moment, analysts
are forecasting today's news to come in at 178K, well below last month's
figure. If true, the dollar may reverse the gains it made yesterday. That being
said, the ADP figure has proven notoriously difficult to predict. If today's
news comes in above analyst forecasts, the dollar may be able to extend
yesterday's bullish momentum going into the second half of the week.
EUR - EUR Stays Range Bound
During Slow Trading Day
most European markets were closed yesterday due to the May Day holiday, the
euro saw mild gains as poor news out of the US and UK continued to drive market
sentiment. The EUR/USD was up around 30 pips during mid-day trading, reaching
as high as 1.3275 before staging a downward correction following positive US
news. The pair eventually stabilized at 1.3220. The common-currency saw similar
gains against the Japanese yen. The EUR/JPY traded as high as 106.02 before
correcting itself and stabilizing at 105.80.
Turning to today, euro traders will want to pay attention to the German
Unemployment Change figure at 07:55 GMT. As the strongest euro-zone economy,
German indicators tend to have a significant impact on the EUR. With analysts
predicting the figure to come in worse than last month's, the euro may take
some losses during mid-day trading today. Additionally, the European
Unemployment Rate, scheduled to be announced at 09:00 GMT is forecasted to go
up to 10.9%. If true the euro could turn bearish against safe haven currencies
like the USD and JPY.
Gold - Gold Reverses Gains
Following Positive US News
price of gold steadily went up in value during the first part of the European
session yesterday, as poor global data caused investors to shift their funds to
the precious metal. That trend abruptly changed, following a better than
expected US ISM Manufacturing PMI which resulted in increased demand for the US
dollar. Gold fell over 600 pips following the news before stabilizing around
$1662 an ounce during afternoon trading.
Turning to today, gold traders will want to pay attention to the US ADP Non-Farm
Payrolls figure, scheduled to be released at 12:15 GMT. With analysts
predicting today's news to come in below last month's, gold may rebound during
the afternoon session. That being said, should the US indicator come in above
expectations, gold may see further downward movement today.
Crude Oil - US
Manufacturing Data Signals Increase in Oil Demand
better than expected US ISM Manufacturing PMI signaled an increase in demand
for crude oil in the world's largest oil consuming country yesterday, and
resulted in a significant boost in prices. Following the news, crude oil shot
up over $1.50 a barrel, reaching as high as $106.29 during the afternoon
Whether or not oil can maintain its current bullish trend is largely dependent
on US news scheduled to be released later today. Should the ADP Non-Farm
Employment Change figure exceed expectations, it may convince investors that
the US economic recovery is continuing, despite several setbacks in recent
weeks. Investors could take any positive news as a sign of increased demand for
oil, which could help the commodity extend its gains.
Williams Percent Rang e on the daily chart has crossed over into overbought
territory, indicating that downward movement could occur in the near future.
Additionally, a bearish cross has formed close to the 80 level on the same
chart's Slow Stochastic. Going short may be the wise choice for this pair,
ahead of a possible downward correction.
a sign that a downward correction could occur in the near future, the Relative
Strength Index has crossed into overbought territory. This theory is supported
by the weekly chart's Williams Percent Range, which is currently well above the
-20 level. Going short may be the wise choice for this pair.
daily chart's Williams Percent Range has crossed over into oversold territory,
indicating that this pair could see upward movement in the near future.
Additionally, the weekly chart's Slow Stochastic seems to be close to forming a
bullish cross. Traders will want to keep an eye on the Slow Stochastic. Should
the cross form, opening long positions may be the wise choice.
daily chart's Williams Percent Range has dropped into oversold territory
indicating that upward movement could occur in the near future. That being
said, most other long term technical indicators show this pair range trading.
Taking a wait and see approach may be the best choice for this pair.