DailyFX.com -
Talking Points:
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Australian Dollar Gains, Yen Falls Amid Correction in Risk Sentiment Trends
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Thin Liquidity May Amplify Knee-Jerk Volatility, Undermine Follow-Through
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The sentiment-geared Australian Dollar outperformed in overnight trade while the safety-linked Japanese Yen traded higher as the markets corrected following Friday’s bout of risk aversion in the wake of Augusts’ US jobs report. The figures showed that world’s largest economy added 173,000 jobs last month, falling short of economists’ expectations calling for a 217,000 increase. The outcome appeared to fuel worries about slowing global growth.
The economic calendar is quiet in European trading hours while North American markets are closed for the Labor Day holiday, hinting that existing momentum faces relatively few hurdles in the coming hours and suggesting that a corrective mood may persist. Caution seems warranted however. Diminished liquidity conditions may serve to amplify volatility in the event that unexpected headline risk emerges. Furthermore, follow-through seems less likely on moves made in thin trade.
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Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
| 23:30 | AUD | AiG Perf of Construction Index (AUG) | 53.8 | - | 47.1 |
| 23:50 | JPY | Official Reserve Assets (AUG) $ | 1244.2B | - | 1242.3B |
| 01:30 | AUD | ANZ Job Advertisements (MoM) (AUG) | 1.0% | - | -0.5% |
| 05:00 | JPY | Leading Index CI (JUL P) | 104.9 | 104.9 | 106.5 |
| 05:00 | JPY | Coincident Index (JUL P) | 112.2 | 112.2 | 112.3 |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
| 06:00 | EUR | German Industrial Production (MoM) (JUL) | 1.1% | -1.4% | Medium |
| 06:00 | EUR | German Industrial Production (YoY) (JUL) | 0.3% | 0.6% | Medium |
| 06:30 | AUD | Foreign Reserves ($) (AUG) | - | 68.9B | Low |
| 07:00 | CHF | Foreign Currency Reserves (AUG) | - | 531.8B | Low |
| 07:00 | CHF | Total Sight Deposits (SEP 4) | - | 463.9B | Low |
| 07:00 | CHF | Domestic Sight Deposits (SEP 4) | - | 396.0B | Low |
| 08:30 | EUR | Eurozone Sentix Investor Confidence (SEP) | 16.0 | 18.4 | Low |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
| EURUSD | 1.0945 | 1.1044 | 1.1096 | 1.1143 | 1.1195 | 1.1242 | 1.1341 |
| GBPUSD | 1.4982 | 1.5093 | 1.5131 | 1.5204 | 1.5242 | 1.5315 | 1.5426 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com