Morning Dealing Room Technical Report

September 17, 2015

Market Comment

Australia

The S&P/ASX 200 index jumped 1.6% or 80.425pts to 5098.86 (day range: 5099 – 5018.4) on Wednesday. The index is below its 20d MA (@ 5127) and below its 50d MA (@ 5383). 41% of the index constituents are above their 20D MA (vs 25% the previous session) and 28% of the shares are above their 50D MA (vs 20%).Australia’s leading index was 97.49 in August vs 97.75 in July, according to the Westpac Banking Corp. and Melbourne Institute in Sydney.

Foreign Exchange

The US dollar was under pressure against its major counterparts except for the JPY on Wednesday. On the economic data front, MBA Mortgage Applications fell 7.0% for the week ending September 11 compared to a decrease of 6.2% in the week prior. CPI MoM fell -0.1% in August as expected. CPI YoY increased 0.2% in-line with estimates.

The Euro was lower against its major counterparts with the exception of the JPY and HKD. In Europe, final Eurozone CPI for August eased to 0.1% year on year (0.2% preliminary). In UK, the unemployment rate dropped to 5.5% in July, above expectations.

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

Last %1D %YTD
EUR/USD 1,1236 -0.29 -7.13
GBP/USD 1,5416 0.47 -1.03
USD/JPY 120,40 -0.01 0.60
EUR/CHF 1,0947 -0.26 -8.88
EUR/JPY 135,2800 -0.31 -6.49
EUR/GBP 0,7287 -0.79 -6.18
AUD/NZD 1,1283 0.42 7.66
AUD/JPY 86,1980 0.22 -11.85
EUR/AUD 1,5695 -0.53 6.00
USD/CAD 1,3232 -0.13 13.87
USD/CHF 0,9743 0.03 -2.01
AUD/USD 0,7159 0.24 -12.43
NZD/USD 0,6345 -0.16 -18.62

Currency Updates:

Medium Term Strategy: Forex Pair of the day
EUR/CAD – previous high in sight
The pair is supported by both a rising trend line in place since April and its ascending 50-day moving average. In addition, the upside breakout of the 1.457 former resistance is a positive signal calling for further advance. Furthermore, the RSI is above a strong support area at 48. As a consequence, above 1.457, another test of the previous high at 1.56 is expected, with an intermediary resistance standing at 1.542. Only a break below 1.457 would tarnish the bullish outlook and favour a correction towards 1.43 and even 1.4, respectively 50ù and 61.8% retracement of the April to August up move.
Intraday Technical Strategy
AUD/USD Intraday: further upside.
Pivot 0.7140
Our preference Long positions above 0.714 with targets @ 0.7225 & 0.7265 in extension.
Alternative scenario Below 0.714 look for further downside with 0.7085 & 0.704 as targets.
Comment The immediate trend remains up and the momentum is strong.

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