Morning Dealing Room Technical Report

August 17, 2015

Market Comment

Australia

The S&P/ASX 200 index declined 0.58% or 31.331pts to 5356.54 (day range: 5401.9 – 5351.5) on Friday. The index is below its 20d MA (@ 5579) and below its 50d MA (@ 5563). 19% of the index constituents are above their 20D MA (vs 20% the previous session) and 34% of the shares are above their 50D MA (vs 31%).

Foreign Exchange

The US dollar was mixed against its major counterparts on Friday. On the economic data front, US July Producer prices increased 0.2% compared to an increase of 0.4% in June. US Industrial production gained 0.6% in July compared to a gain of 0.3% in June (0.3% estimate). The University of Michigan Consumer sentiment index fell to 92.9 in August for the second month, below the 93.5 expected.

The Euro was under pressure against its major pairs except for the New Zealand Dollar. In Europe, in Eurozone, GDP growth slowed to 0.3% from 0.4% in the first quarter, missing economists forecasts of a 0.4% gain. German GDP growth quickened to 0.4% from 0.3% in the first quarter, falling short of economists’ forecasts of a 0.5% gain. In UK, construction output in June rose 0.9 percent on the month, below economists’ forecasts of a 2.2 percent pick-up.

The Australian dollar traded higher against its major pairs.

Last %1D %YTD
EUR/USD 1,1112 -0.34 -8.15
GBP/USD 1,5646 0.22 0.44
USD/JPY 124,30 -0.10 3.85
EUR/CHF 1,0845 -0.39 -9.73
EUR/JPY 138,1300 -0.45 -4.52
EUR/GBP 0,7102 -0.57 -8.55
AUD/NZD 1,1287 0.78 7.70
AUD/JPY 91,7450 0.19 -6.16
EUR/AUD 1,5056 -0.63 1.67
USD/CAD 1,3096 0.28 12.69
USD/CHF 0,9760 -0.04 -1.84
AUD/USD 0,7381 0.29 -9.71
NZD/USD 0,6539 -0.49 -16.13

Currency Updates:

Medium Term Strategy: Forex Pair of the day

GBP/JPY – the upside prevails
The pair has strongly rebounded above the support at 185 and remains on the upside. Further advance is likely as the moving averages and the daily RSI remain well directed. Next targets are set at 196.70 at first (horizontal resistance and Fibonacci projection of the previous up move) and at 201.60 in extension (same Fibonacci projection). A third target is set at 209 (horizontal resistance). Only a break below the horizontal support and overlap at 185 would turn the outlook to bearish with a first alternative target set at 179.40 (horizontal support) and a second one set at the horizontal support at 175.

Intraday Technical Strategy

AUD/USD Intraday: the upside prevails.
Pivot 0.7320
Our preference Long positions above 0.732 with targets @ 0.743 & 0.749 in extension.
Alternative scenario Below 0.732 look for further downside with 0.727 & 0.7215 as targets.
Comment The RSI is well directed.
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