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Asia AM Digest: Aussie Dollar May Extend Drop on Jobs Data

Asia AM Digest: Aussie Dollar May Extend Drop on Jobs Data

Research, Research Team


Get the Asia AM Digest every day before Tokyo equity markets opensign up here !

The Japanese Yen proved to be strongest currency on the day as risk appetite unraveled across financial markets. Top global equity indexes were almost universally in the red, with Spain’s IBEX the sole winner on the day in the G10 space. The S&P 500 benchmark suffered its largest daily drop in over two months.

The Australian Dollar suffered the brunt of selling pressure in the wake of disappointing wage growth data that seemed to trigger a dovish shift in RBA policy expectations. October’s employment data now looms ahead. An outcome echoing a string of disappointments since mid-year may compound selling pressure.

DailyFX Economic Calendar: Asia Pacific (all times in GMT)

DailyFX Webinar Calendar– 16 October 2017

Live Data Coverage: Australia Employment (00:15 GMT) with David Cottle

Trading Q&A (02:00 GMT) with Ilya Spivak

Bitcoin and Cryptocurrency Outlook (03:00 GMT) with David Cottle

Trading Psychology & Mechanics (10:30 GMT) with Paul Robinson

Central Bank Weekly (12:30 GMT) with Christopher Vecchio

IG Client Sentiment Index Chart of the Day: NZD/USD

CLICK HERE to learn more about the IG Client Sentiment Index

Retail trader data shows 62.7% of traders are net-long NZD/USD, with the ratio of traders long to short at 1.68 to 1. In fact, traders have remained net-long since Oct 18 when NZD/USD traded near 0.71707; price has moved 4.2% lower since then. The number of traders net-long is 9.2% lower than yesterday and 11.4% lower from last week, while the number of traders net-short is 9.5% higher than yesterday and 29.4% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests NZD/USD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current NZD/USD price trend may soon reverse higher despite the fact traders remain net-long.

Five Things Traders are Reading

  1. AUD/USD Bounces Along Channel Support Ahead of Australia Employment by David Song, Currency Analyst
  2. EUR/JPY Technical Analysis: Support Bent, but Not Broken by James Stanley, Currency Strategist
  3. Near-term Setups in USD/JPY, GBP/USD and Ethereum by Michael Boutros, Currency Strategist
  4. Bitcoin Momentum Continues, Hedge Fund Giant Signals Interest by Nick Cawley, Analyst
  5. EUR/USD Head & Shoulders Unravels as Fed Officials Fear Low Inflation by David Song, Currency Analyst

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.