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Commodity currencies rise on USD weakness

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It has been a slow day for most global economies today when it comes to data, but it was also another day of weakness in the USD as it continued to fall on the charts on the back of Trump comments. Markets have very much had a risk appetite for the start of the week though with a weaker USD and we are seeing this across the commodity currencies as they have leapt back to life after taking a sustained beating. One of those key movers has been the Australian dollar which crept up the chart today ahead of construction data which is expected to be positive compared to the previous quarter. This comes on the fact that a number of backlogged contracts are likely to finally kick into gear, and this data will also be factored into the upcoming GDP figures not too far down the line as well. So there is some minor positives for the Australian economy, despite a rate rise looking some time off.

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For the AUDUSD on the charts the quick rise has hit a bit of a wall in the form of the 50 day moving average, which was quick to unleash the bears lower. This was also around the key resistance area of 0.7377 and the market was apprehensive at first before looking to test the 50 day MA. For me what is also likely to hold back further movements - unless we see a crash in the USD - is of course the trend line which is very bearish and so far has held back any movements higher. Markets will be keen to test this, but given the recent economic data it would be a surprise to see it broken just yet. If the AUDUSD does look to fall lower then key support levels can be found at 0.7310 and 0.7237 in the long run.

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The other major mover continues to also be equity markets with the S&P 500 jumping up sharply today before paring back some gains. It looks likely that the S&P 500 will be a key focus for traders in the coming week as they look to push it up to resistance at 2877 and also see if there is further potential above that. It certainly has been a rocky road to get here, and some in the market still believe we are slightly overbought. If the market does fall lower then support levels can be found at 2847 and 2818, with both levels likely to see bounces if the bulls still believe they can see upside potential.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.


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