USD weakness was another strong theme in today's trading day as US economic data continues to disappoint - it's getting to the point now where it's kind of expected. US initial jobless claims jumped to 298K (245k exp); a very large deviation to what was originally expected and there could be further hurt down the line as the cyclones put people out of work for a while. So despite the jump there may be further pain ahead in the markets. There is also the subject of who will lead the FED in 2018 as Trump looks to appoint a new head of the FED, obviously some are expecting the next incoming FED chairman to be more hawkish than Yellen who is aptly named 'the dove' after her tenure. Certainly my expectations is that he shakes things up and brings in someone more pro business and likely to lift interest rates in the future.
For all the USD weakness there were plenty of winners but the big one today for me was the AUDUSD which managed to crack through strong resistance at the 80 cent mark and is looking to climb higher. After disappointing retail sales at 0.0% (0.2% exp) you'd think that the market would be quite bearish, but in this case the weakness in the US market has carried over and the AUDUSD has always been a favourite for the carry trade. Home loan data is also due out tonight, but a slowdown here is not a bad thing, as the Australian housing market has been referred to as a bubble on numerous occasions and causes the Reserve Bank of Australia plenty of headaches.
So for the AUDUSD it looks like the bulls are certainly trying to take control and take it to the bears after all. After breaking through the 80 cent barrier it will be interesting to see if it falls back and can hold at support at 0.8006. For the next level of resistance the market will be targeting 0.8154 and I would be looking at the 20 day moving average to support these movements higher. If we do see the bears come back into the market then 0.8006 and 0.7901 are likely to be the key levels that traders look to target.
Lastly when it comes to market movers gold continues to be one to watch, the bulls have not let up on this one. The market saw a further extension higher and with a weak USD and flat equity markets some traders be worried that the party could be over.
Gold technical's are very bullish at present and I would be surprised to see it stop before the 1400 mark if the market remains as it is. Current resistance can be found at 1368 with the possibility of bulls pushing high if the market remains the same. Expectations are certainly building around a weaker US economy in the short term based of the data and of course the recent hurricanes. Support levels can be found at 1339 and 1313.