The Aussi has come under pressure again by disappointing employment change in April by -22.1k from 37.8k in March while the market was waiting for rising by 17.4k. The Aussi has been exposed to a strong correction since the release of April Australian commodities prices which have fallen yearly to 32.3% from 42.2% in March and also following the weak release of April Australian retail sales which came down in April by .5% after rising in March by .5% while the market was waiting for .6% to put another pressure on it accompanied with falling of commodities prices and Now, The Aussi can meet resistance at 1.0887, 1.0931 then 1.101 again, in the case of rising back again as it has actually broken the trend line support extended from .9704 to 1.0441 earlier and after reaching 1.0535, it has formed a lower high below this trend line support at 1.0887 and if it is to come down further should meet 1.0535 and in the case of breaking it this time it can face another supporting level at 1.0441
The sterling could rise above 1.65 after UK inflation quarterly report which has ensured the same warning of April MPC minutes about the inflation rising to 5% to hint for a possibility of tightening by the end of this year as the report has shown a lower worry about the growth than expected as it has repeated the negative impact of the governmental austerity measures of spending on the growth which was lower than BOE's forecasting in Feb of the first quarter which rose by .5% in the preliminary release to lower some more of the stagflation risks facing the UK economy following the declining of March CPI to 4% from 4.4% in February. The sterling came under pressure again after it could not come over 1.6516 to ease back below 1.64 to 1.6318 as the risk appetite could contain the market sentiment back with the falling of commodities and energy prices supporting the greenback and it's next supporting level can be now 1.6269, 1.6164 and 1.5935 and over a longer range, it can get back 1.5744 and by god's will, in the case of ascending back, it can meet resistance at 1.5616 again then 1.6573 by its high of this year at 1.6744
Kind Regards
FX Market Strategist
Walid Salah El Din
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