Morning Dealing Room Technical Report

October 6, 2015

Market Comment

Australia

The S&P/ASX 200 index jumped 1.95% or 98.517pts to 5150.53 (day range: 5153.6 – 5052) on Monday. The index is above its 20d MA (@ 5084) and below its 50d MA (@ 5247). 76% of the index constituents are above their 20D MA (vs 55% the previous session) and 46% of the shares are above their 50D MA (vs 37%).

Australia inflation gauge rose 0.3% MoM in September (vs +0.1% last month), according to TD securities. On YoY basis, September inflation gauge rose 1.9% (vs +1.7% last month).

Australia’s job advertisements rose 3.9% MoM in September vs +1.3% in August, according to the Australia & New Zealand Banking Group Ltd.

Foreign Exchange

The US dollar was mixed against its major counterparts on Monday weaker vs the NZD, AUD and CAD. On the economic data front, MARKIT US composite PMI was at 55 in Sept from 55.3 in Aug. US Services PMI was at 55.1 from 55.6. U.S. Non- Manufacturing ISM lowered to 56.9 in Sept from 59 in Aug.

The Euro was lower against its major pairs with the exception of the CHF and JPY. In Europe, euro zone PMI composite index was 53.7 in September in final estimation vs 54 in first one and 54.4 a month earlier. Separately euro zone retail sales were flat in August, as expected, after a 0.6% rise in July. UK PMI services index fell to 53.3 in September, its lowest since May 2013, vs 55.6 in August and 56 a month before.

The Australian dollar was higher against all of its major pairs except for the NZD.

Last %1D %YTD
EUR/USD 1,1184 -0.29 -7.56
GBP/USD 1,5149 -0.24 -2.75
USD/JPY 120,42 0.42 0.61
EUR/CHF 1,0911 0.14 -9.18
EUR/JPY 134,6800 0.20 -6.90
EUR/GBP 0,7383 -0.10 -4.94
AUD/NZD 1,0899 -0.41 4.00
AUD/JPY 85,3260 0.87 -12.73
EUR/AUD 1,5784 -0.77 6.60
USD/CAD 1,3089 -0.48 12.63
USD/CHF 0,9755 0.40 -1.89
AUD/USD 0,7086 0.58 -13.32
NZD/USD 0,6501 1.09 -16.62

Currency Updates:

Medium Term Strategy: Forex Pair of the day

EUR/USD – within a bullish channel
The pair has broken above a falling wedge upper boundary and remains supported by he 50-days moving average. Moreover, the daily RSI is well directed above its neutrality area. Then, as long as 0.7110 holds as a support, further advance is likely with the previous overlap at 0.76 as a first target. A break above this threshold would call for further bounce towards the strong horizontal resistance at 0.7740 and towards January top at 0.7875 in extension. Only a break below 0.7110 would call for a trend reversal with a first alternative target set at July 17 bottom at 0.6930 and a second one set at 0.6815.

Intraday Technical Strategy

AUD/USD Intraday: the upside prevails.
Pivot 0.7035
Our preference Long positions above 0.7035 with targets @ 0.7115 & 0.715 in extension.
Alternative scenario Below 0.7035 look for further downside with 0.7 & 0.6975 as targets.
Comment The RSI is mixed to bullish.

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