Morning Dealing Room Technical Report

October 27, 2015

Market Comment

Australia

The S&P/ASX 200 index was flat on Monday. The index is above its 20d MA (@ 5198) and above its 50d MA (@ 5158). 83% of the index constituents are above their 20D MA (vs 84% the previous session) and 81% of the shares are above their 50D MA (vs 82%).

Foreign Exchange

The US dollar was under pressure against most of its major counterparts except for the CHF on Monday. On the economic data front, Sales of new U.S. homes slumped to the lowest level since November last year. Sales dropped 11.5% to a 468K annualized pace and the prior two months were revised lower.

The Euro was Mixed against all its major pairs. In Europe, IFO business climate fell to 108.2 in October from 108.5 the month before. It was expected to be 107.8.

The Australian dollar was higher against all its major pairs.

Last %1D %YTD
EUR/USD 1,1050 0.29 -8.66
GBP/USD 1,5347 0.22 -1.48
USD/JPY 121,03 -0.36 1.11
EUR/CHF 1,0864 0.74 -9.57
EUR/JPY 133,7400 -0.07 -7.56
EUR/GBP 0,7200 0.06 -7.30
AUD/NZD 1,0679 -0.09 1.90
AUD/JPY 87,6920 0.05 -10.30
EUR/AUD 1,5251 -0.03 2.99
USD/CAD 1,3166 0.00 13.30
USD/CHF 0,9832 0.45 -1.12
AUD/USD 0,7245 0.40 -11.38
NZD/USD 0,6785 0.47 -12.98

Currency Updates:

Medium Term Strategy: Forex Pair of the day

EUR/USD – turning down
The pair has broken below the lower boundary of a bullish channel in place since March and should face further weakness as the it stands below the moving averages. Moreover, the daily RSI is badly directed. Then, as long as 1.1495 holds as a resistance (october top), further weakness is likely with 1.0810 as a first target (horizontal support) and 1.0450 in extension (March low). A third target is set at 1.0190 (previous overlap). Only a rebound above 1.1495 would turn the outlook to bullish with a first alternative target set at 1.1730 (horizontal resistance) and a second one set at 1.2050 (overlap, July 2012 bottom).

Intraday Technical Strategy

AUD/USD Intraday: the upside prevails.
Pivot 0.7235
Our preference Long positions above 0.7235 with targets @ 0.7305 & 0.7345 in extension.
Alternative scenario Below 0.7235 look for further downside with 0.7195 & 0.716 as targets.
Comment The RSI lacks downward momentum.

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