Senior Trader Update 10/04/2017

Good morning all,
 
By now everyone would be aware of the US missile strike against Syria on Friday, a geopolitical development that we flagged in Friday morning’s comment but the rapidity of escalation which still managed to cause a good deal of surprise.
 
Gold consequently benefited from the “safe-haven” bid and proceeded to surge from AUD 1659 to   AUD 1689 during the Far Eastern timezone.
 
Gains were subsequently pared prior to the arrival of European participants as the markets settled and consolidated awaiting the arrival of US investors and the much anticipated release of the Non-Farm Payrolls and employment data for March.
 
Nonfarm payrolls disappointed to the downside as they came in at just +98k for March (vs +180K expected with February negatively revised to +219k, from +235k previously). The unemployment rate dropped to 4.5% from 4.7% with the labour force participation rate holding steady at 63%.
 
Curiously, gold rallied after the data but was unable to clear sold resistance just beneath AUD 1690/oz and a technical triple top on the intraday chart (see attached) caused a significant retracement into the close with AUD/Gold yielding almost 50% of the days  low / high range by the NY close.
 
The arguably schizophrenic foreign policy of the US, with Trump administration officials seemingly changing their position on the desirability (or lack thereof) of regime change and military intervention in Syria and the broader Middle East on an almost hourly basis is causing major consternation amongst investors and the general public, particularly Trump’s anti-war, anti-regime change base - many of whom have begun to question the President’s judgement or outright abandoned him. White hot rhetoric from US ambassador to the UN Nikki Hayley, as well as US Secretary of State Tillerson apportioning blame towards the Russia and Iran for the chemical weapons incident also threatening to inflame tensions and signal the onset of something potentially far more wide reaching and dire.
 
With all that in mind, geopolitical developments shall remain front and centre for the foreseeable future.
 
From a technical perspective, whilst AUD/GOLD didn’t post a classic “key reversal” (a fresh high followed by a daily close below the previous day’s low), nonetheless the markets retreat was something of a “blow off top” suggesting that some of the excessive long speculative length may need to be unwound before any further forays to the topside.
 
Have a good day and a good week ahead.
 
Kind regards,

Andre