The focus in the London forex session was on the Aussie dollar following the overnight employment data, an interesting release which superficially appeared weak, yet the currency rose strongly. Why? As always with any fundamental news, the media tends to concentrate on the headline number which are easy to report before moving on to the next item in the constant search for ‘new news’. Reading these numbers in isolation would have suggested weakness, when in fact what the data revealed was a growth in full time employment matched with a decline in part time work.
In addition, participation rates were also up, and whilst the increase in jobs fell well below the forecast with the headline unemployment rate remaining the same as before, the combination of good news on participation coupled with an increase in full time work was enough to send the AUD higher across the complex, with the New Zealand dollar benefitting also. This is something we cover in detail in The Complete Forex Trading Program, to look behind the headline numbers which are the most widely reported, and look for trends in the underlying numbers. It was also interesting to note the divergence in the com dollars with the AUD and the NZD rising whilst the CAD moved lower, driven partially by weakness in the price of oil.
So the AUD/CAD was the one to follow from overnight and into the London session, with strength in one counterbalanced with weakness in the other, with some nice volume price analysis lessons on the CAD/JPY.
Leave a Reply