If you've been watching the AUDUSD then you might be finding some of the economic data coming out recently as slightly puzzling. The most recent employment data was what you might call a "dozy", as the Australian Bureau of Statistics stunned the market with a positive reading of 58.6K (exp 15.0k). For many this would be a great result, after all the unemployment rate has now as a result of this reading dropped to 5.9% from 6.2%. But the problem with this is that after all the dust settles and clears the market is actually no better off, because the reading is false after the ABS said itself today that the reading was based off a change in data, as it moved away from seasonal adjustments. Hence my relatively strong caution here regarding this as good news, in a world of falling commodity prices.
After finding some strong support at 0.7022 the AUDUSD has managed to find some serious momentum in the short term and climb back up the daily chart in the current bearish channel. Obviously it's a glass half empty scenario here, as it retreated quickly after touching the channel walls, but nevertheless we can now see that many are worried about bullish movements higher at present. Also after failing to push through the bears certainly look in control as it closes below the 20 MA and the 50 MA, showing that despite the recent momentum, many are still looking at this as a sure thing that may see further rate cuts in an uncertain world.
The Oil markets have taken another crazy twist lower as they are now looking to push at 40.94, this comes as no surprise other than how quick it has fallen. But today has been one of those days as Saudi Arabia has increased its overall production by 50k barrels a day, and at the same time we saw a surplus in America of 4 million barrels - enough to scare of any bulls who are looking for a pick up at this stage. So with oil falling it's likely we will see some negative consequences across global markets, as oil bears have a bad habit of turning on each other.
Silver as I spoke about yesterday is looking very interesting as we enter uncharted waters as it continues to slip down the charts and into a bears paradise. Despite the bearish movement is in actual fact looking like it's oversold at present; I say this because momentum lower has been held back on strong support at present and the likely hood of further drops seems a little off putting for anyone trading this steep trend.
Further drops on the chart for silver are likely to find support at 14.119 and pull-backs are certainly quite real given the volatile nature of silver, and its ability to do well in boom times as well as recessionary periods. Any push though back up higher is likely to find resistance quick at 14.356 and we may in actual fact struggle to see any direction for a while
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