I wait the reaction of investors when Asia tradng session opens. If they SELL AUD and NZD, and BUY JPY, I think they indeed fear about tension in Ukraine.
AUD and NZD will react first, and then JPY.
Geopolitics elements always have certain impacts on FX market, and we should not ignore it.
The Russian Ruble absolutely dumps to the hell next week, and don't forget Russia is an emerging market. The withdrawal from Russia might be very strong, and this could affect to other Emerging markets and the financial market of the world.
Next week, there are a lot of economic data from both US and Australia released:
- Monday: ISM Manufacturing PMI + RBA Statement.
- Tuesday: Australia GDP
- Wednesday: ISM Non-Manufacturing PMI +ADP report.
- Friday : NFP report.
If the tension in Ukraine is more and more strong, those above economic data would have no value. But if the traders don’t care about what happen in Ukraine. They would consider Economic data.
- I expect RBA would keep their neutral bias about AUD.
- ISM Manufacturing PMI and Non-Manufacturing PMI could be positive: Durable Goods Orders last week was very positive: Manufacturing activities begin to come back its pace after severe winter.
- Regarding NFP report (key data must be considered): If ADP report is more than 200k , the NFP could be higher 160k forecast, if ADP report is lower 200k, It is very hard for NFP to keep above 160k forecast. Of course, I don’t want to play guessing game, and I have to prepare for any situation could occur.
- Australia GDP report: Australia is a commodity export country: last week, the Trade Balance is 486M, very positive, and I think Australia GDP might be exact with forecast : 2.5%
One more thing, China is the main trading partner of Australia, and the Aussie is absolutely affected by the devaluing of Chinese Renminbi : Last week , despite the greenback drop its value against other currencies, Aussie moved opposite that bias.
I will SHORT AUDUSD to 11.4% Fib retracement: 0.8777, stop loss at 0.9073. This is the first target: the final target is the low : 0.8651
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