Morning Dealing Room Technical Report

September 16, 2015

Market Comment

Australia

The S&P/ASX 200 index dropped 1.53% or 78.034pts to 5018.44 (day range: 5103.5 – 5017.8) on Tuesday. The index is below its 20d MA (@ 5141) and below its 50d MA (@ 5390). 25% of the index constituents are above their 20D MA (vs 36% the previous session) and 20% of the shares are above their 50D MA (vs 26%).

Foreign Exchange

The US dollar was higher against its major counterparts on Tuesday. On the economic data front, US retail sales rose 0.2% in August compared to a 0.7% increase in July. (0.3% estimate). Empire Manufacturing index decreased -14.67 in September compared to -14.92 in August (-0.50 estimate). Industrial production fell -0.4% in August compared to an increase of 0.9% in July (-0.2% estimate).

The Euro was under pressure against its major counterparts. In Europe, the seasonally adjusted trade balance rose to 22.4 billion euros from 21.9 billion euros in June. The latest surplus was the biggest in more than a year. In Germany, the ZEW economic expectations index for September showed a drop to 12.1 from 25.0 in August. In UK, the consumer price index (CPI) rose by 0.2% month-on-month in August but was flat versus a year ago.

The Australian dollar was mixed against all its major pairs.

Last %1D %YTD
EUR/USD 1,1271 -0.41 -6.84
GBP/USD 1,5357 -0.45 -1.41
USD/JPY 120,21 -0.02 0.43
EUR/CHF 1,0984 0.23 -8.57
EUR/JPY 135,4900 -0.41 -6.35
EUR/GBP 0,7339 0.04 -5.50
AUD/NZD 1,1234 -0.36 7.20
AUD/JPY 85,2870 -0.61 -12.75
EUR/AUD 1,5886 0.19 7.28
USD/CAD 1,3269 0.04 14.19
USD/CHF 0,9746 0.63 -1.99
AUD/USD 0,7095 -0.60 -13.21
NZD/USD 0,6315 -0.25 -19.01

Currency Updates:

Medium Term Strategy: Forex Pair of the day

USD/ZAR – end of the consolidation
The pair retreated from a new high at 14 without validating any reversal sign. Thus, this consolidation is expected to come to an end soon, potentially around the 20-day moving average (MA), which has been acting as a support since July. In addition, even if the 20-day MA is penetrated, the downside potential is expected to be limited to the 12.95 support area (rising trend line and ascending 50-day MA). As a consequence, above 12.95, a rise towards14 and 14.8 is expected. Only a push below 12.95 would tarnish this bullish outlook and call for a deeper correction towards 12.6 and even 12.3.

Intraday Technical Strategy

AUD/USD Intraday: further upside.
Pivot 0.7085
Our preference Long positions above 0.7085 with targets @ 0.7165 & 0.719 in extension.
Alternative scenario Below 0.7085 look for further downside with 0.705 & 0.702 as targets.
Comment The RSI is well directed.

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