The Australian dollar continued its bullish trend on Wednesday after positive data came out on consumer sentiment where it increased b 3.7%, but the bulls couldn’t last long as the home loans fell sharply and that too unexpectedly. The US dollar pushed the Aussie downwards as the trade deficit of the US declined to $48.7 billion than the previous $50.6 billion mark.
Australia’s unemployment rate came out 5.2% as expected, but the employment change was drastically negative at the level of -27.0k and that is the reason why Aussie fell sharply in the Australian session on Thursday right after the news release.
Yesterday, AUD/USD tested SMA 5 and SMA 10 with the then RSI of 59% showing bullish direction; whereas, the upper Bollinger was moving straight and the middle and lower were shaping towards upside.
The Japanese yen gained two year high point against the US dollar on Wednesday, amid the speculation of QE3 from the side of FED in FOMC Meeting minutes, but US dollar gained substantial points on no sign of QE3 from FED. The Bank of Japan kept the interest rate as it is at 0.1%, while its service sector contracted by 0.3% in April due to sluggish growth in transport, electricity and other services area. Economists expect further decline in growth of service sector in upcoming months.
USD/JPY has been moving in mixed pattern for the past two weeks, where it has not tested SMA 5, SMA 10, and SMA 15 yesterday. The RSI at 51% reading is showing mild bullish trend, whereas all three bands of Bollinger are forming a straight direction that indicates contraction.
The crude oil inventories of the United States fell to -4.7M from -4.3M; moreover, the gold futures were trading lower on Wednesday morning due to the euro economic growth concerns loom around and the speculation on FOMC meeting in the US session. The fall in Chinese exports in the month of June also intensified the economic outlook concerns. Yesterday’s low was 1566.47 while it recovered to some extent after FOMC meeting and closed near 1576.10 point.
Next, the US unemployment claims and the quarterly GDP data of China would be the most important ones to follow, as it would clear out the clouds from the mixed trend of the US dollar and certainly would result in either direction to move on with.