Weekly Currency Market Report 24/10/2016

October 24, 2016

Welcome to this weeks Compass Global Markets Weekly Currency Market Report.


Each report will look to explain current price action, highlight potential market moving events and guide on ways to best deal with your currency exposure. 

The Market in Brief:

AUD down V USD, GBP, JPY, NZD and up V EUR, CHF, CAD.
AUD hits 2 month high V USD, 17 month high V EUR and CHF and fresh 40 month high V GBP.
AUD RBA Monetary Policy Meeting Minutes suggest rate cuts are done for now. Jobs numbers disappoint but unemployment rate drops.
AUD hits multi month highs then drops as forecast. See my interview on CNBC http://video.cnbc.com/gallery/?video=3000560494
Market Events Due:

EUR German IFO Business Climate (Tue) Draghi speaks (Wed)
USD CB Consumer Confidence (Wed) Core Durable Goods Orders and Unemployment Claims (Thur) Advance GDP (Fri)
GBP BOE Gov Carney speaks (Wed) Prelim GDP (Thur)
Referrals: Client referrals are very important to our business. If you know of any contacts that can benefit from our comprehensive range of international currency transfer services please do let me know.

AUDUSD: The AUD finished the week down only 10 points but at one stage hit a fresh 2 month high. Once again the solid levels of resistance that have held over the last 5 months remained intact. On Tuesday the RBA minutes suggested rate cuts are done for the time being and on Thursday jobs printed negative 9,800 V expected plus 15,200 but the unemployment rate dropped 1 tick from 5.7% to 5.6%. Importers can target those levels again which are 2% higher whilst exporters or those looking to buy AUD can target 100 points lower.

AUDEUR: The AUD finished the week up 0.6% against the EUR posting its second weekly gain. The medium term resistance that has held since March this year was broken and it went on to hit a fresh 17 month high. Importers can target that rate again which is almost 1 % higher. Exporters can target 1% lower as that level of resistance now broken will act as short term support.

AUDGBP: After 5 consecutive weekly gains AUD finished the week down 1% against the GBP. It came very close to the highs from the flash crash 2 Fridays ago but could not break that resistance. So AUD is still up 17% against the GBP since the day of Brexit and up 27% in 14 months. UK data over the past week has been mixed. 

AUDNZD: The AUD closed the week down down 1% against the Kiwi after 2 consecutive up weeks. The solid levels of resistance that have held in place since June remained intact. Importers can target levels of 150 points higher while there is short term support at these levels. If they break exporters can target 100 points lower.  

AUDJPY: The AUD had its second consecutive down week against the JPY closing 0.35% lower. The levels of resistance that have held over the past 3 weeks have remained intact. Importers can target this level 100 points higher while exporters can target levels of support 100 points lower.  

AUDCHF: AUD posted its second consecutive weekly gain against the CHF, up a marginal 0.25%. At one stage it hit an 18 month high so importers can target that level which is 100 points higher. There is short term support here but a break could see a run 100 points lower. The solid resistance that held in place since November was broken for a couple of days before turning rather quickly.

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