Australia’s Unemployment, UK Retail Sales and The New Head of EU Commission

This morning we received the Australian unemployment number, which came out the same as expected. During the European morning, once again we will have UK coming out with another important economic data set. This time the country will produce its retail sales numbers, both headline and core. Speaking about politics, the new president of the European Commission was elected. For the first time in history, the top seat went to a female candidate.

Australian Jobs; UK Retail Sales

Initially, we saw AUD selling off, but the move lower was short-lived and the Australian dollar accelerated straight after that. We believe that if there won’t be any news, for now, surrounding the US Trade War with China, or the US tensions with Iran, AUD might hold on to its gains, or even drift a bit higher against some of its major counterparts.

The RBA is monitoring the labour market carefully, in order to keep wage growth at necessary levels. In the minutes, released earlier this week, the Bank mentioned that the RBA will adjust its policy “if needed” to better support the economy.

During the European morning, once again we will have UK coming out with another important economic data set. This time the country will produce its retail sales numbers, both headline and core. The headline MoM and YoY figures are believed to have improved from their previous ones. The MoM is forecasted to have risen from -0.5% to -0.3% and the YoY number is expected to have grown from +2.3% to +2.6%. Even though those are potential good figures, still, the March numbers were almost three times higher than the current expectations. Even if the data comes out in line with forecasts, or slightly better, we doubt that it will have a significant effect on the British pound. GBP could remain vulnerable to the news regarding the UK politics, together with Brexit related issues.

Van Der Leyen Steps In; Lagarde Steps Down, In Order To Step In Later

Ursula van der Leyen has a plan to give the EU Parliament the right to propose legislation, because at this time, the institution can only vote on the proposals from individual states and the Commission. In addition to that, van der Leyen will try to put more emphasis on problems regarding climate change. Also, she wants to create an EU budget, or a scheme, in order to protect bank deposits in EU countries. Another proposal is a new unemployment and minimum wage scheme, which should be implemented across all EU states. It might be difficult task to do in real life. That said, one member state seems to be showing its support on the proposed social and economic plans of van der Leyen, and that is France.

Another important news piece that hit the tabloids, was the resignation of the IMF chief, Christine Lagarde. This, of course, is due to the future nomination of her as the next President of the European Central Bank. After notifying of her resignation, she said she will leave on September 12 th. Her term as the chief of the IMF was scheduled to end in 2021. As it is known, in the beginning, Christine Lagarde was not so keen on the idea of becoming the head of the ECB.

AUD/CAD — Technical Outlook

A strong break above the 0.9203 barrier, could send the rate higher, potentially bypassing the 0.9229 hurdle and targeting the 0.9254 zone, marked by the high of June 11 th. The pair might stall there for a bit, or even correct back down slightly. But if the bulls are still feeling comfortable and AUD/CAD remains above the aforementioned downside line, we will continue aiming higher. Another strong move up may force the 0.9254 area to surrender to the bulls. After that, they might lift the rate to the 0.9277 level, marked near the lows of May 24 thand June 7 th.

On the other hand, a reversal back down below the above-mentioned downside line, could spook the buyers from the game, especially if the rate falls below the 0.9140 hurdle, marked by yesterday’s low. This is when we will examine again the 0.9105 obstacle, a break of which could clear the path to the 0.9073 mark, which is the lowest point of July, so far.

GBP/AUD — Technical Outlook

A drop below the above-mentioned hurdle, at 1.7672, could open the door for a further slide towards the 1.7627 zone. That zone marks the lowest point of this week, which may help stall the rate initially. But if the bears are still feeling more comfortable, a break of the 1.7627 area would confirm a forthcoming lower low and could send the pair to the 1.7559 level, marked by the low of December 19 th, 2018.

On the upside, in order to shift our views to some higher areas, we will wait for a break of the aforementioned downside line and a push above the 1.7860 barrier, marked near the lows of July 3 rdand 5 th. This is when we will aim for the 1.7920 obstacle, a break of which could lift the rate to the psychological 1.8000 level. That level was last time tested on July 11 th.

As For The Rest Of Today’s Events


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Originally published at on July 18, 2019.



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