Forex: Australia GDP slightly weaker; Euro retains heaviness
FXstreet.com (Barcelona) - The USD has been on the demand across the board during the Asia-Pacific session on Wednesday, even against the Yen, reaching a weekly high in the USD index above 81.50. EURUSD dipped as low as 1.2522, lowest for the week, though as senior currency strategist at Bank of New Zealand Mike Jones say: "expect any near-term dips to be limited to 1.2435-65." The pair is last trading at 1.2536, down -0.24% for the session.
AUDUSD also had a selling start in the region falling as low as 1.0185 on the back of lower than expected 2Q Aus GDP, but recovering nicely above 1.0200 again, last at 1.0220, just 5 pips below where started. EURAUD selling, now at session lows and around yesterday's lows, is also helping the Aussie bid case.
Australian GDP Q2 slower
For the 2Q GDP, which came at +0.6% with revision of previous 1Q to +1.4% from +1.3%, National Australia Bank chief economist Alan Oster, quoted by the Sydney Morning Herald, said growth was slightly weaker than expected because consumers had held back slightly in the quarter. "It's a touch slower than what we're thinking, mainly because consumption was a bit lower than what we were expecting," he said. "I think the economy will probably slow in the second half," he added.
Equity market in the red
In the local equity markets front all over is tinted in red, with Nikkei falling for fifth consecutive day, today slightly above the 8700 round mark, down by -0.60%, recovering a bit following lunch break. Hang-Seng also trades lower by -1.23%, while Shanghai deals with fresh 3-year lows. The US SP500 futures has been more stable during the Asian session above the 1400 mark, though still retracing from yesterday's highs. Gold is still firm around fresh 5-month highs, but unable to get over the key $1700 mark, while Brent oil shows weakness near wek lows last at $114.63.
What lies in the session ahead?
The London session ahead will bring just few minor PMI figures from the EU in terms of EUR macro data related and EU retail sales. Spanish services PMI will be out at 07:13 GMT, followed 30 minutes later by Italian services PMI, 5 minutes later by French one, another 5 minutes for German one, and finally another 5 minutes for the EU final services PMI at 07:58 GMT. EU retail sales are due at 09:00 GMT. At 13:00 GMT EU's Van Rompuy is expected to meet French PM Hollande so very probably some headlines will come that way.
In the sovereign debt auctions front from the EZ Germany will sell up to ¬ 5B in 10 year bunds at 06:00 GMT with a previous bid to cover ratio at 1.8 and a final yield at 1.42%, while yesterday Germany 10 year yields in the secondary market closed at 1.39% again on the rise from recent lows at 1.30% given limited risk appetite seen lately with DAX near multi-month highs. Chart of the day yesterday was the 2 year bond from Spain which almost touched the 3% yield when not even 2 months ago was above 7%.
Technical picture on EURUSD, AUDUSD
Immediate support for EURUSD to the downside shows at recent session/weekly lows at 1.2522, followed by Friday's lows at 1.2493, and Aug 28 lows at 1.2463. As Sean Lee from FXWW points out: There is short-term technical support the secondary trendline near 1.2520, and I prefer to wait for the second level before trying an intraday long. Bad news is never too far away from the EUR so I think we still need to be careful with entry levels," the analyst says. For the upside, closest resistance comes at yesterday's lows 1.2553, followed by Aug 28 highs at 1.2577, and Monday's high at 1.2610.
For AUDUSD, immediate resistance to the upside comes at yesterday's Asian session lows and today's one highs at 1.0222, followed by Monday's Asian session lows at 1.0240, and yesterday's highs/Fri-Thur lows at 1.0280. For the downside, nearest term support shows at recent session/5-week lows at 1.0185, followed by July 25 lows at 1.0175, and July 09 lows at 1.0150.
AUDUSD also had a selling start in the region falling as low as 1.0185 on the back of lower than expected 2Q Aus GDP, but recovering nicely above 1.0200 again, last at 1.0220, just 5 pips below where started. EURAUD selling, now at session lows and around yesterday's lows, is also helping the Aussie bid case.
Australian GDP Q2 slower
For the 2Q GDP, which came at +0.6% with revision of previous 1Q to +1.4% from +1.3%, National Australia Bank chief economist Alan Oster, quoted by the Sydney Morning Herald, said growth was slightly weaker than expected because consumers had held back slightly in the quarter. "It's a touch slower than what we're thinking, mainly because consumption was a bit lower than what we were expecting," he said. "I think the economy will probably slow in the second half," he added.
Equity market in the red
In the local equity markets front all over is tinted in red, with Nikkei falling for fifth consecutive day, today slightly above the 8700 round mark, down by -0.60%, recovering a bit following lunch break. Hang-Seng also trades lower by -1.23%, while Shanghai deals with fresh 3-year lows. The US SP500 futures has been more stable during the Asian session above the 1400 mark, though still retracing from yesterday's highs. Gold is still firm around fresh 5-month highs, but unable to get over the key $1700 mark, while Brent oil shows weakness near wek lows last at $114.63.
What lies in the session ahead?
The London session ahead will bring just few minor PMI figures from the EU in terms of EUR macro data related and EU retail sales. Spanish services PMI will be out at 07:13 GMT, followed 30 minutes later by Italian services PMI, 5 minutes later by French one, another 5 minutes for German one, and finally another 5 minutes for the EU final services PMI at 07:58 GMT. EU retail sales are due at 09:00 GMT. At 13:00 GMT EU's Van Rompuy is expected to meet French PM Hollande so very probably some headlines will come that way.
In the sovereign debt auctions front from the EZ Germany will sell up to ¬ 5B in 10 year bunds at 06:00 GMT with a previous bid to cover ratio at 1.8 and a final yield at 1.42%, while yesterday Germany 10 year yields in the secondary market closed at 1.39% again on the rise from recent lows at 1.30% given limited risk appetite seen lately with DAX near multi-month highs. Chart of the day yesterday was the 2 year bond from Spain which almost touched the 3% yield when not even 2 months ago was above 7%.
Technical picture on EURUSD, AUDUSD
Immediate support for EURUSD to the downside shows at recent session/weekly lows at 1.2522, followed by Friday's lows at 1.2493, and Aug 28 lows at 1.2463. As Sean Lee from FXWW points out: There is short-term technical support the secondary trendline near 1.2520, and I prefer to wait for the second level before trying an intraday long. Bad news is never too far away from the EUR so I think we still need to be careful with entry levels," the analyst says. For the upside, closest resistance comes at yesterday's lows 1.2553, followed by Aug 28 highs at 1.2577, and Monday's high at 1.2610.
For AUDUSD, immediate resistance to the upside comes at yesterday's Asian session lows and today's one highs at 1.0222, followed by Monday's Asian session lows at 1.0240, and yesterday's highs/Fri-Thur lows at 1.0280. For the downside, nearest term support shows at recent session/5-week lows at 1.0185, followed by July 25 lows at 1.0175, and July 09 lows at 1.0150.
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