Morning Dealing Room Technical Report

August 14, 2015

Market Comment

Australia

The S&P/ASX 200 index increased 0.11% or 5.785pts to 5387.87 (day range: 5426.2 – 5387.87) on Thursday. The index is below its 20d MA (@ 5595) and below its 50d MA (@ 5566). 20% of the index constituents are above their 20D MA (vs 18% the previous session) and 31% of the shares are above their 50D MA (vs 33%).

Foreign Exchange

The US dollar was higher against all its major counterparts on Thursday. On the economic data front, US Retail Sales rose 0.6% in July compared to a decrease of 0.3% in June. Import prices decreased 0.9% in July due to the strong dollar. Initial jobless claims held just above the four-decade low reporting 274K for the week ending August 8 compared to a revised 269K in the week prior. Continuing claims increased to 2273K for the week ending August 1 vs a revised 2258K the week before.The Euro was mixed against its major pairs. In Europe, German consumer prices were up by 0.2% in July in final estimation, as expected, after a 0.1% drop in June. UK RICS House Price Balance Index was up to 44% in July from 40% the month before (42% anticipated).

The Australian dollar traded lower with the exception of the New Zealand and the Canadian dollar.

Last %1D %YTD
EUR/USD 1,1155 -0.04 -7.79
GBP/USD 1,5609 -0.03 0.21
USD/JPY 124,44 0.19 3.97
EUR/CHF 1,0886 0.02 -9.38
EUR/JPY 138,8200 0.16 -4.05
EUR/GBP 0,7147 0.00 -7.98
AUD/NZD 1,1199 0.48 6.85
AUD/JPY 91,6500 -0.02 -6.26
EUR/AUD 1,5147 0.15 2.29
USD/CAD 1,3059 0.61 12.38
USD/CHF 0,9759 0.06 -1.85
AUD/USD 0,7365 -0.19 -9.91
NZD/USD 0,6576 -0.66 -15.66

Currency Updates:

Medium Term Strategy: Forex Pair of the day

USD/JPY – the upside prevails
The pair has rebounded above the upper boundary of an Ascending Triangle. Moreover, the ascending 200-day moving average is coming in support and the daily RSI stands above its neutrality area. Therefore, as long as 120 holds as a support (former horizontal resistance now acting as a support and rising trend line in place since late 2014), targets on the upside are set at 126 (horizontal resistance) and 127.7 (theoretical target of the triangle). A third target is set at 132. Only a break below 120 would turn the outlook to bearish with a first alternative target at 118 (horizontal support) and 115.50 (December bottom) in extension.

Intraday Technical Strategy

AUD/USD Intraday: under pressure.
Pivot 0.7390
Our preference Short positions below 0.739 with targets @ 0.727 & 0.721 in extension.
Alternative scenario Above 0.739 look for further upside with 0.743 & 0.749 as targets.
Comment The RSI is badly directed.

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