AUD/USD

The July Australian Trade Balance reading expected to decline to 3100M from a surplus of 3539M the prior month, came in softer than expected at 1888M. Following the release the AUD/USD pair moved to fresh session lows after falling below the 91 cent handle following the turn of the day, where we made fresh highs at.9115. Looking at the daily chart we could see some bids for the pair in the middle of the 90 cent level if commodity pair continue to pull back from their appreciation the last 24 hrs that began with better PMI numberts out of China and a stronger Australian GDP. To the top side an increased risk appetite would seem to be required to have the pair test the early August highs above 92 cents.

The AIG Performance of Mfg Index fell by 2.7 points to 51.7 in August, based in part on slower growth in production and new orders. Although this is the 8th consecutive month of expansion in the index, uncertainty in the government and the impact of a strong Aussie is containing growth in the Manufacturing sector. On an hourly chart we saw the AUD/USD find some resistance and move lower from the 38.2% retracement following the weaker release.

 
Overnight the risk pairs were shunned.  EURUSD broke through key support at 1.2775 area, GBPUSD fell toward key support.  USDCAD moved higher toward trendline resistance. AUDUSD tested 100 day MA level (AGAIN).  USDJPY is contained however.  No economic data has the market watching the stocks today. For a preview of the key technical levels, click on the Morning Forex Commentary.

Video coming

Japan’s GDP came in at +0.1% vs expectations fo +0.6%. The worse than expected growth has led to a flight out of risk. The AUDUSD and NZDUSD fell sharply on the back of lower global growth. The Yen got stronger across the board with the risk pairs like GBPJPY, AUDJPY and EURJPY falling sharply. Tertiary Activity out of Japan also came in weaker than expectations at -0.1 vs 0.0% expectations.