Australian February employment data due at 0030GMT
What to expect is here
For the AUD ...
The overnight moves post FOMC have wiped out much of the order book interest close to market. This is quite normal, any orders that were hanging around in the range we saw have been done, of course.
And what that leaves us with is a sparse order board.
As we approach the data release, and over it, liquidity will diminish. This is normal.
(Are you leaving large orders limit hanging out there in the breeze over the release? Some will, most will not. While some (not all) limit orders will be pulled to reduce risk over the release, stop loss orders will build as we approach we the release, as normal)
What this means is that if the data is a surprise (see the link above for consensus expectations) the moves can be large and sharp. Be extra careful.
What I'm hearing is that IF the number is better than expected there is a danger of a sharp move higher - there are stops above the earlier week high (above 0.7600). This should not be surprising, of course there are stops above that high. But note, they are substantial in size.
If the number is a miss then there will be a move lower for the AUD, but the extent of the move is unlikely to be as large as if we get an upside surprise. As I've already said, there is a paucity of interest within the overnight range, so that could exacerbate any downside move though. Levels are not as clear either.
