Aussie Shows Relative Strength

Last updated 3/9/2010 3:01 AM ET (GMT -5) 4 Comments

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Boris Schlossberg

Director of Currency Research, GFT

While both euro and pound drifted lower in Asian session today, the Aussie continued to hold ground around the .9100 figure boosted by strong business sentiment and labor data. Australian NAB Business confidence survey rose to 19 from 15 the month prior while ANZ Job Advertisements soared to 19.1% from a decline of -8.1% on January. The dramatic jump in ANZ data was the biggest gain in more than 2 years  and bodes well for the Australian employment report due Thursday at 00:30 GMT.

Ahead of the Australian labor data, traders will also get a glimpse of the Chinese Trade Balance report which is expected to compress to 7.6 Billion from 14.2 Billion the month prior. Some analysts have pointed out that an increase in the  latest measure of the Baltic Dry Goods index which has risen to 3250 from 2750 a week earlier may also prove bullish to the AUD/USD& nbsp;as it indicates an expansion in global trade.

We continue to believe that the Aussie represents the best bet on risk in the currency market and the unit  should remain well bid if the labor data on Thursday continues to show strong growth. Having consolidated its gains near the .9000 level, the Aussie is poised to make another run at the yearly highs near .9300 handle if risk appetite remains constructive in the near term.

Comments (4)

FXDragon

March 09, 2010 at 03:59 AM ET

How about selling the news theory on jobs data?

bschlossberg

March 09, 2010 at 05:00 AM ET

Can you please clarify? Do you mean sell on the news?

Pidgeon

March 09, 2010 at 11:58 AM ET

He Means "buy the rumor, sell the news". Old quote, doesn't apply here.
What I'm more interested in is that we have a head and shoulders pattern on the daily charts centered around 9300 for the top of the shoulders. This would indicate a longer term reversal technically speaking. But all signs seem to point to a robust Aussie recovery compared to most other currencies. My question for Boris: Is it possible for a pair to ignore this type of pattern, and resume the bullish trend we've seen since March of 09? I'm bullish on it anyway, its just that pattern makes me doubt what would otherwise be a no brainer trade.

Murtadha

March 09, 2010 at 03:01 PM ET

Can we be bullish on AUD/JPY

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About The Author

Boris Schlossberg began his Wall Street trading career more than 20 years ago at Drexel Burhnam Lambert. There, he traded nearly every type of financial product on the market in the U.S., from equities and options to stock index futures and foreign exchange. His innate ability to analyze market information and use it to trade has helped him become an industry-recognized, “go to” trading professional.

These days, whenever the markets move, many organizations turn to Schlossberg for his take on the situation. He is a weekly contributor to CNBC's Squawk Box and a regular commentator for Bloomberg radio and television. His daily currency research is widely quoted by Reuters, Dow Jones and Agence France Presse newswires and appears in numerous newspapers worldwide. Schlossberg has written for publications like SFO magazine, Active Trader and Technical Analysis of Stocks and Commodities. He is also the author of Technical Analysis of the Currency Market and the co-author of Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game with Kathy Lien. He joined GFT in 2008.