1. Papa G backed off from the referendum and has effectively handed in his resignation
2. G20 summit in focus and the details of the bailout plan to be finalized.
3. ECB has dropped interest rates by 25bps
4. RBA has dropped interest rates by 25bps
5. FOMC and ECB has indicated economic headwinds going into the final quarter of the year. Monetary easing appears to be the dominant stance.
6. Non-farm payroll print this evening
Short term, headlines and activity appear to support further relief rallies for risk assets. Key event risk tonight is NFP stat. A better than expected print will ensure we get another leg up in risk assets, whereas a worst than expected print may cause some bullish demand for US dollar.
AUD/USD
The Ozzie rocketed up on monetary easing measures and the news out of Greece. Looks to be targeting critical level at 1.500. Still looking for short position opportunities as sentiment is still quite battered and economic fundamental outlook is uncertain. This week's low PMI print out of China suggests a slowdown in Chinese economy.
If entered, will be looking at a first target of the downward sloping neckline which had a failed breakout of the head and shoulders pattern earlier in the week.
Gold
Tracking higher on the back of uncertainty. Nice break of 1750 level. Will look to buy on dips on this one as the wave count suggests either a 5th wave leg up or a sub 3rd wave leg up. Intraday break of 1720 would suggest a target of heavy support zone at 1700. Only a comprehensive break of this area would flip back to bearish scenario.
Key bullish drivers for gold is risk aversion. From what I can see, general inflationary/economic driven risk aversion pushes it up. However, if liquidity risk aversion is at the forefront, then this drives it down. Expect to see a hammering in this pair if Europe blows up, otherwise should be quite well supported.
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