May 5th 2016: Dollar Rally Dims

• This morning, the two day dollar rally has dimmed, after a strong push higher yesterday. There more questions than answers from yesterday’s data with ADP employment change coming in below expectations, but ISM non-manufacturing PMI pushing above estimates.

• The Yen is equally quiet this morning after small gains in the last few days.

• The Australian dollar is attempting a counter rally this morning, but it has some way to go after the recent selling.

• The British pound is nudging higher after slipping back yesterday. The EUR/ GBP is set for its first decline in four sessions despite yesterday’s poor UK construction PMI.

• Coming up today we have UK services PMI at 09.30.
• US unemployment claims then follow at 13.30.
• It is a public holiday in France and Germany for Ascension day.

Trade Idea: 

• The AUD/ JPY is on the rise this morning, but the trend is still negative and the Australian economy still shaky despite the recent rate cut.

• A good way to play this is a LOWER trade predicting that the AUD/ JPY will close below 80.00 in 14 days for a potential return of 120%.

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