Morning Dealing Room Technical Report

October 21, 2015

Market Comment

Australia

The S&P/ASX 200 index declined 0.65% or 34.135pts to 5235.57 (day range: 5269.7 – 5228.7) on Tuesday. The index is above its 20d MA (@ 5149) and above its 50d MA (@ 5163). 75% of the index constituents are above their 20D MA (vs 81% the previous session) and 68% of the shares are above their 50D MA (vs 74%).
Foreign Exchange
The US dollar was weaker against its major counterparts on Tuesday with the exception of the NZD. On the economic data front, Housing Starts rose to 1206K in Sept from a revised 1132K in Aug. Building Permits lowered to 1106K in Sept from a revised 1161K in Aug.

The Euro was higher against its major pairs except for the CAD. In Europe, Germany PPI index fell 0.4% in September after a 0.5% drop a month ago. Economists anticipated a 0.2% slide.

The Australian dollar was stronger against all its major pairs except for the CAD.

Last %1D %YTD
EUR/USD 1,1345 0.16 -6.22
GBP/USD 1,5446 -0.12 -0.84
USD/JPY 119,85 0.29 0.13
EUR/CHF 1,0851 0.18 -9.67
EUR/JPY 135,9600 0.43 -6.02
EUR/GBP 0,7345 0.27 -5.43
AUD/NZD 1,0749 0.70 2.56
AUD/JPY 87,0050 0.44 -11.00
EUR/AUD 1,5627 -0.02 5.53
USD/CAD 1,2978 -0.31 11.68
USD/CHF 0,9565 0.04 -3.80
AUD/USD 0,7259 0.15 -11.20
NZD/USD 0,6754 -0.54 -13.38

Currency Updates:

Medium Term Strategy: Forex Pair of the day

AUD/USD – under pressure

The pair is posting a rebound but stands below the strong horizontal resistance at 0.76. Moreover, the daily RSI is reversing down below its overbought area. As a consequence, further weakness is expected with a first target at 0.6865 (horizontal support) and a second one set at 0.6650. A third target is set at 0.6350 (horizontal support). Only a rebound the strong horizontal resistance at 0.76 would turn the outlook to bullish with a first alternative target set at the previous overlap at 0.7805 and a second one set at May top at 0.8165.

Intraday Technical Strategy

AUD/USD Intraday: under pressure.

Pivot 0.7305
Our preference Short positions below 0.7305 with targets @ 0.724 & 0.7225 in extension.
Alternative scenario Above 0.7305 look for further upside with 0.7345 & 0.738 as targets.
Comment The RSI is bearish and calls for further downside.

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