Saturday, June 4, 2016

Forex Market: AUD/NZD trading outlook for June 6th

Friday's trade saw AUD/NZD within the range of 1.0529-1.0617. The pair closed at 1.0588, edging down 0.21% on a daily basis. It has been the 12th drop in the past 23 trading days and also a fourth consecutive one. In weekly terms, AUD/NZD lost 1.27% of its value during the current week. It has been the 11th drop in the past 22 weeks and also the sharpest one since the week ended on May 1st, when the minor pair depreciated 3.09%. AUD/NZD has gone down 0.99% so far during the current month, following a 1.89% slump in May. The latter has been the wo rst monthly performance since December 2015.

On Monday (June 6th) AUD/NZD trading may be influenced by the following macroeconomic reports as listed below.

Fundamentals

Australia

MI Inflation Gauge

At 1:00 GMT on Monday (June 6th) the University of Melbourne will release its estimate of inflation in Australian economy as of May. Annualized inflation estimate for April pointed to a rate of 1.5%. If inflation rate tends to slow down, this lowers the probability of an interest rate hike by the Reserve Bank of Australia (RBA), which would usually have a bearish effect on the national currency. It is so, because assets, offering lower yields tend to be unattractive to international investors, who will look to re-direct their capital to another state or region. As a result, demand for the domestic currency will be reduced.

Job Advertisements

At 1:30 GMT the Australia and New Zealand Banking Group (ANZ) will publish data regarding the number of job advertisements in Australia in May. It encompasses advertisements in the major metropolitan newspapers and on the Internet sites. The corresponding index, based on a survey by the ANZ, dropped 0.8% to 153 872 advertisements in April compared to March.

Internet job advertisements were 0.7% fewer in April, after a 0.4% increase in the preceding month. At the same time, newspaper job advertisements fell 6.2% during the period, following an 11.4% slump in March.

This indicator is used for projecting employment growth in Australia, as it reflects labor market conditions in the future. An increase in the number of jobs would have a limited bullish effect on the Australian dollar, while a decrease would have the opposite effect.

Correlation with Major Pairs

Taking into account the business week ended on June 3rd and the daily closing levels of the currency pairs involved, we come to the following conclusions in regard to the strength of relationship:

AUD/NZD to USD/JPY (0.9268, or very strong)
AUD/NZD to USD/CHF (0.7400, or strong)
AUD/NZD to GBP/USD (0.5660, or strong)
AUD/NZD to USD/CAD (0.4312, or moderate)
AUD/NZD to EUR/USD (-0.6866, or strong)
AUD/NZD to AUD/USD (-0.7875, or strong)
AUD/NZD to NZD/USD (-0.9084, or very strong)

1. During the examined period AUD/NZD moved almost equally in one and the same direction with USD/JPY, while moving almost equally in the opposite direction compared to NZD/USD.

2. AUD/NZD moved strongly in the opposite direction compared to EUR/USD and AUD/USD during the week.

3. AUD/NZD moved strongly in one and the same direction with GBP/USD and USD/CHF during the period in question.

Daily and Weekly Pivot Levels

By employing the traditional calculation method, the Monday pivot levels for AUD/NZD are presented as follows:

Central Pivot Point – 1.0578
R1 – 1.0627
R2 – 1.0666
R3 – 1.0715

S1 – 1.0539
S2 – 1.0490
S3 – 1.0451

By using the traditional method of calculation again, the weekly pivot levels for AUD/NZD are presented as follows:

Central Pivot Point – 1.0631
R1 – 1.0734
R2 – 1.0879
R3 – 1.0982

S1 – 1.0486
S2 – 1.0383
S3 – 1.0238

Author: [1] Miroslav Marinov, a financial news editor at Binary Tribune, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market.

References

  1. ^ (www.binarytribune.com)

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