Talking Points:
Australian Dollar Gains, Yen Falls Amid Correction in Risk Sentiment Trends
Thin Liquidity May Amplify Knee-Jerk Volatility, Undermine Follow-Through
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The sentiment-geared Australian Dollar outperformed in overnight trade while the safety-linked Japanese Yen traded higher as the markets corrected following Friday’s bout of risk aversion in the wake of Augusts’ US jobs report. The figures showed that world’s largest economy added 173,000 jobs last month, falling short of economists’ expectations calling for a 217,000 increase. The outcome appeared to fuel worries about slowing global growth.
The economic calendar is quiet in European trading hours while North American markets are closed for the Labor Day holiday, hinting that existing momentum faces relatively few hurdles in the coming hours and suggesting that a corrective mood may persist. Caution seems warranted however. Diminished liquidity conditions may serve to amplify volatility in the event that unexpected headline risk emerges. Furthermore, follow-through seems less likely on moves made in thin trade.
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Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
23:30
AUD
AiG Perf of Construction Index (AUG)
53.8
–
47.1
23:50
JPY
Official Reserve Assets (AUG) $
1244.2B
–
1242.3B
01:30
AUD
ANZ Job Advertisements (MoM) (AUG)
1.0%
–
-0.5%
05:00
JPY
Leading Index CI (JUL P)
104.9
104.9
106.5
05:00
JPY
Coincident Index (JUL P)
112.2
112.2
112.3
European Session
GMT
CCY
EVENT
EXP
PREV
IMPACT
06:00
EUR
German Industrial Production (MoM) (JUL)
1.1%
-1.4%
Medium
06:00
EUR
German Industrial Production (YoY) (JUL)
0.3%
0.6%
Medium
06:30
AUD
Foreign Reserves ($) (AUG)
–
68.9B
Low
07:00
CHF
Foreign Currency Reserves (AUG)
–
531.8B
Low
07:00
CHF
Total Sight Deposits (SEP 4)
–
463.9B
Low
07:00
CHF
Domestic Sight Deposits (SEP 4)
–
396.0B
Low
08:30
EUR
Eurozone Sentix Investor Confidence (SEP)
16.0
18.4
Low
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EURUSD
1.0945
1.1044
1.1096
1.1143
1.1195
1.1242
1.1341
GBPUSD
1.4982
1.5093
1.5131
1.5204
1.5242
1.5315
1.5426
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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Source: Daily fx