A$ Underperforms, January Employment Data Coming Up

AUDUSD trended down on Wednesday on local equity weakness and continued moving down to a low of 0.6865 during the NY session as the USD rallied further following strong US retail sales data. Aussie underperformed most of the G10 except for GBP. AUDUSD is off its lows and is currently around 0.6905. USD DXY is up 0.6%.

• AUDUSD on Wednesday approached initial support of 0.6856 but didn’t clear it. Technicals continue to signal an uptrend for now and the recent moves lower highlight a correction. Key resistance and bull trigger is 0.7158, the February 2 high.
• Aussie fell 0.3% against kiwi to be below 1.10 again and is now around 1.0992. AUDJPY is down 0.4% but off of its intraday low of 91.92. AUDEUR is 0.7% lower to 0.6461 while AUDGBP is flat at 0.5740.
• Equity markets were stronger with the S&P up 0.3% and Eurostoxx +1.0%. VIX fell to 20.5%. Oil prices fell on data showing another large inventory build in the US but unwound that drop by end of trading and Brent is currently around $85.28, down 0.4% on the day. Copper prices fell 1.2% while iron ore is $123-124/t.
• Today the highlight in Australia is the January labour market report. Employment is expected to rise 20k while the unemployment rate should be stable at 3.5%. There is also CBA household spending intentions for January and February MI consumer inflation expectations.