Wednesday was very quiet for currencies, at least compared to previous days. Nothing significant happened, with most pairs consolidating after strong earlier moves. This is likely to change on Thursday, especially in early hours. The Unemployment Rate from Australia is on the calendar and this announcement almost always creates volatility. Analysts expect the rate to increase to 5.3% from 5.1% in August. Interestingly, the forecast for the Employment Change is positive, calling for 3.75K new jobs. That would make for another curious report, but the press will surely explain it after the fact. That is secondary. However, if the AUD moves decisively following the release, its direction might set the tone for other currencies later in the day, making it important to watch.
The GBP-USD trade took a long time to develop, but when using 4H charts, one has to expect that. In early phase, the price moved sharply in opposite direction, but stalled at the 100 SMA. It remained well within the latest swing down from 1.6270. Only a move above that resistance would have changed the sentiment to bullish. I closed this trade in early hours on Wednesday, at 1.5985, expecting a consolidation for 1-2 days.
I would like to take a look at Aussie pairs, but will not do it before the unemployment numbers in early Thursday trading. Meanwhile, the intermediate term chart of the EUR-CAD caught my attention. While it is possible that this pair is building a large-scale consolidation in an uptrend, the new minor low at 1.2572 might indicate a reversal. A move below this level would confirm that, in which case I plan to sell it at 1.2565, targeting about 120 pips. Clearly, this will take some time to develop, probably several days.
Mike K.
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