Wednesday, July 31, 2013

As predicted, a good ADP report gives profit to AUDUSD shorts

Today is the last day of the month. It is also the day on which the ADP payroll report comes out, which attempts to anticipate the official government Non-Farm payrolls on Friday. This in turn is the strongest factor in the Federal Reserve’s decision to taper Quantitative Easing. The Fed is finishing a two day meeting and will possibly indicate policy, although the recent experiences of marked volatility in the markets on the back of his comments may just make Mr. Bernanke more circumspect.

Gross Domestic Product (GDP) figures are also out today and they have the power to affect the US dollar also.

Down Under, the AUDUSD pair is just on the verge of breaking through the significant support that was formed last month, after clearing the recently formed support at 0.91368. Rate cuts from the Reserve Bank of Oz are still very much on the cards so the trend here is markedly to the downside. Strong GDP figures in the USA and / or a good ADP payrolls report will accelerate this tendency, while the opposite could only have the effect of dampening it for the time being.

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