Fresh Market Headlines & Economic data : AUDUSD plunges down on reports that RBA will cut at the next meeting
Empire State business conditions index climbed eight points to 17.8, its highest level in six months U.S. business inventories flat in March, but sales jump 1.6% US industrial production fell 0.5% in April, and the rates of change for previous months were revised down on net Australian employment at 2:30 am GMT (May 16).
We’ve got top tier Australian data ahead to potentially rock the Aussie, making this strong trend in AUD/USD one to watch for the session. Aussie bulls continue to see dark days thanks to the U.S.-China trade tensions that have risen over the past week or so putting pressure on both global risk sentiment and risk assets. This has created a solid downtrend in AUD/USD on the one hour time frame that has barely slowed down, with an exception to minor support around the 0.6970 handle. The move could have more legs to it, especially with a likely burst in volatility ahead thanks to the upcoming Australian quarterly employment update. The forecast is for the net change to come in below the previous read, and for more details to catch up on before the event, check out Forex Gump’s post, “Event Preview: Australia’s Jobs Report (April)” Given the current down trend behavior, looking for a short position makes the most sense, but with U.S. data coming in pretty weak this morning and the stochastic indicating potentially oversold conditions short-term, a bounce might be due pretty soon. If so, then the bears should be a look out for a retest of that minor area of interest around 0.6970 and reversal patterns to couple with a weak Aussie jobs number later. For the bulls, it’s gonna take a heck of strong positive surprise for the markets to get bullish on the Aussie at the moment, but anything is possible as we saw with Canada’s surprise positive employment update earlier this month. Even so, it would also probably take a positive turn in the U.S-China trade negotiation story for the market to get bullish on the Aussie, and if that happens, look for a break of the falling highs pattern, which should not be a problem if we do see a trade deal between the two super power countries.