USD: BBDXY - Breaks Below 1210 Extending Its Losses
The BBDXY range overnight was 1204.45 - 1211.13, Asia is currently trading around 1206, -0.02%. The unexpected dovish tilt from the FOMC has put the USD firmly back under pressure and this move had another extension lower overnight after breaking below the 1210 support. If the market has read the FOMC correctly the USD could be in some trouble here as it looks to reassert the downtrend. On the day look for resistance again back towards the 1209-1212 area where sellers should remerge initially, looking for a test of the overnight lows. Support is in the 1204/05 area; a move below here would target 1198-1200.
- The move in metals is gaining real traction and is providing real headwinds for the USD as the “debasement theory” again comes to the fore.
- The BBDXY Average True Range for the last 10 Trading days: 396 Points
Fig 1: BBDXY Weekly Chart
Source: MNI - Market News/Bloomberg Finance L.P
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
JPY: CNH/JPY - Dips Remain Supported, Testing 21.70 Resistance
The overnight range was 21.5902 - 21.6816, Asia is currently trading around 21.6600. The pair continues to find demand on dips and while the 21.30-21.40 support area holds I suspect this will carry on. With risk building on its recent gains and Japanese Policy keeping the JPY under pressure it is looking to test the 21.70/75 resistance area. A break above here would turn the focus back toward the highs of 2024 seen around the 22.20 area.
Fig 1 : CNH/JPY Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
EURJPY: EUR/JPY - Back Testing The Years Highs, 180 Next ?
The overnight range was 178.12 - 178.74, Asia is trading around 178.65. The pair is back to testing the year's highs again as dips remain very well supported as sentiment in risk has surged and Japanese Policy keeps the JPY under pressure. The move is looking a little overdone as it flirts with levels not seen since the early 1990s but I suspect dips will continue to be supported in the short-term though as the trend remains your friend. The first support is back toward 1.7600 which held last week and then the more important 174.00-175.00 area.
Fig 1 : EUR/JPY Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
AUSTRALIA: Steady October Labour Market Forecast, Watch Underemployment Too
After the unemployment rate rose 0.2pp to 4.5% in September, the October jobs release will be monitored closely to see if there is some stabilisation as the data can be volatile on a monthly basis. Bloomberg consensus expects it to fall 0.1pp to 4.4% with new jobs up 20k and the participation rate stable at 67%. RBA Governor Bullock has advised to look at the data on a 3-month average basis.
- The unemployment rate is widely expected to normalise somewhat at 4.4% but there are a few economists who expect it to stay at 4.5% or fall back to 4.3%. All of the big four local banks are forecasting a 0.1pp decline to 4.4%. The Q3 average was 4.3%.
- Employment projections are between 10k and 45k. CBA and NAB are in line with consensus at 20k after September’s 14.9k increase. ANZ and Westpac are not as optimistic expecting a 15k rise. Job gains averaged 12.3k in Q3.
- The break down between full-time (FT) and part-time (PT) employment and hours will also be important as a shift to more part-timers signals less confidence in the outlook by employers. FT jobs averaged 10.2k in Q3 and PT 2.1k.
- RBA Governor Bullock has noted numerous times that the central bank looks beyond the headline labour market figures. In terms of Thursday’s release, the underemployment and youth unemployment rates will also be important. They averaged 5.8% (Q2 6.0%) and 10.0% (Q2 9.6%) in Q3 respectively. Hours worked are another focus point.
