Where will the bears likely attack the Aussie Dollar? #LTGGoldrock

The Aussie Dollar is one of my least likely currencies to trade simply because there are currencies such as the US Dollar and Kiwi Dollar that have offered more volatility in the past few months. BUT the volatility is likely going to return to the AUD and the sellers could attack when the price gets below the 200 Day Moving Average on the Daily Chart. You can see from the snap shot below there are some support levels around the 0.92 level but under 0.9177 there is far less support and this also coincides with the 200 Day Moving Average on the Daily Chart which is the red line.

LTG GoldRock Reviews the latest on the Aussie Dollar #LTGGoldrock 

I did warn traders last week about the Yen.

The Yen has risen in value the most in a month on the back of geopolitical tensions and stock market volatility. Even though the Bank of Japan continues to print staggering amounts of money to prop up its economy. I warned in this report last week about trying to get long on the Yen when negativity is in the air on stocks and geopolitical tensions are rising.
Currently there is a war in Iraq, Syria, Ukraine and the deadly battles between Israel and Hammas don't seem to be going away either. I doubt an overnight cease fire between Hammas and Israel will hold as both sides seem hell bent on their demands and no ceasefire has held true so far, so why should we expect this one to hold.
The Yen and Swiss Franc have the potential to gain strength in the short term so just be careful in the coming week or so trying to play the Yen and Swiss Franc short. As I mentioned last week I personally do not trade the Yen at all because of its unpredictable volatility.

The US Fed says the magic money printing press will stop soon.

We've seen the US Fed wind back the amount of money it has been magically printing from $85 Billion a month to $35 Billion a month since December last year and in Wednesday’s monthly minutes the Fed said,

"Participants generally agreed that if incoming information continued to support its expectation of improvement in labor market conditions and a return of inflation toward its longer-run objective, it would be appropriate to complete asset purchases with a $15 billion reduction in the pace of purchases in order to avoid having the small, remaining level of purchases receive undue focus among investors. If the economy progresses about as the Committee expects, warranting reductions in the pace of purchases at each upcoming meeting, this final reduction would occur following the October meeting."

This should be around the same time financial markets begin to factor in higher interest rates in the US in the coming 12 months as usually the speculation rally begins 12 months out from when the rates actually go up.

The US Dollar didn't get a boost from this news overnight but if the economic data continues to improve it will only be a matter of time.

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US Non-Farm Payrolls data comes a day early.

The first Friday of every month is the day the Labour Department in the US releases its monthly official unemployment report but due to the July 4th national holiday tomorrow the official unemployment data will be released today at 10.30pm AEST.

If last night’s private ADP employment report is anything to go by the official data tonight could surprise to the upside by quite a bit. The ADP private jobs report Wednesday showed that the US economy added 281,000 jobs in the month of June which is well above the market estimates of around 210,000 to 215,000. The US Dollar rallied on this news but I will remind you that on the odd occasion we have seen the private and official jobs data in the past be vastly different.  But overall it is generally a decent guide and my sensors are telling me to watch for a better than expected number tonight.

The US Dollar rose Thursday simply because of expectation of a pickup in the US economy which would mean the US Fed may need to change its stance on when they plan to raise interest rates. One jobs number won't change the Fed's mind but a number of solid months of jobs gains will certainly get their attention and the speculation rally could very well begin in September or October. If the US did create over 200,000 jobs in June that will mark the 5th consecutive month of jobs numbers over 200,000 and it would be the best streak of jobs numbers since the year 2000.

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The US Fed when you are sleeping will release its latest policy statement at 4am Thursday morning. They will reduce more stimulus but Yellen's statement and comments about the economy will be what the market watches. Yellen's a Dove, and she'll always speak conservatively in my view so don't expect any major surprises even though the US economy has continued to improve in the last month. She won't want to send a clear message yet about interest rates. That will happen in my view late in 2014 once the stimulus is wound back to $0 and the economy has improved further. 

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Iraq keeps markets subdued for now.

The threat that oil supplies could be disrupted with the ongoing geopolitical situation in Iraq kept markets mostly on edge on Monday with currencies rising and falling throughout the trading session. The US Industrial Production number whilst beating estimates was not strong enough to propel the US Dollar higher and I would suspect from this point the US Dollar will begin a crawl sideways until the US Fed's policy statement on Thursday morning Sydney time.

The usual safe haven currencies such as the Yen and Swiss Franc were in demand on Monday but not overly so. We've seen a number of these Middle Eastern and European crisis situations over the past 2 years with Syria, Libya, Ukraine and Egypt all threatening world peace.  I don't want to play down the humanitarian emergency in Iraq with thousands of men and women being slaughtered by Sunni Islamist insurgents but the financial markets will once again move on in the coming days and weeks and the interest rate movements of Central Banks and the standard fundamentals will drive the markets overall. Sure, the market is a little nervous right now but these geopolitical events are common place every year and in all the years I have been trading there isn't one that has overshadowed the big picture fundamentals longer term. Just stick with your strategy!

Each day Andrew Barnett supplies a Market Update in the GoldRock Insider Report www.ltggoldrock.com