FBS.com - Daily/Weekly Analysis / Market News

[riki143]

US dollar: outlook for Oct. 31 - Nov. 1

10/28/2016

 

US dollar index consolidated around 98.70. The currency gained, though bullish momentum has somewhat declined. The market expects the US Federal Reserve to raise interest rates in December. According to CME, futures market sees about 70% probability of such move.

 

Advance data showed that US economic growth accelerated from 1.4% in Q2 to 2.9% versus the forecast of 2.5%. The American economy grew at the fastest pace in 2 years driven by higher exports and inventory investment, though somewhat offset by offsetting a slowdown in consumer spending.

 

The Fed will meet on Wednesday, November 2, but this meeting isn’t regarded seriously by the market. No moves are expected from the US central bank until after the US presidential election passes. With the market expecting a rate hike at the end of this year the Fed’s policymakers don’t need to sound very hawkish and significantly change September statement. In September, the regulator said that the case for a rate hike has strengthened, but it’s necessary to have more evidence of the economic recovery.  

 

Apart from the Fed’s meeting, the US economic calendar is full of important events. Core PCE price index, personal spending, and Chicago PMI are due on Monday, while ISM manufacturing PMI will be published on Tuesday. ADP employment report will be released on Wednesday, unemployment claims, and ISM services PMI will come out on Tuesday, while Friday will be market by the increased volatility because of nonfarm payrolls (NFP) and other pieces of the US labor market data.

 

Next week the greenback may test support at 98.00 and 97.65 for the US dollar index. Trading will be very data dependent. 

 

 

More:

https://fxbazooka.com/analytics/11096

[riki143]

Key option levels for Tuesday, November 1st

11/1/2016

 

EUR/USD

 

 

Main trend Short-term period Medium-term period

Neutral Bearish

Changes in the open interest + 114 184 ? + 49 619 ?

Closest resistance levels 1.1000; 1.1037; 1.1070; 1.1111

Closest support levels 1.0950; 1.0923; 1.0887; 1.0844

Trading recommendations

Baseline scenario Short EUR/USD below 1.0950, with target points at 1.0923 and 1.0887

Alternative scenario Moving above 1.1000 can be considered as a signal to Buy the pair, with target at 1.1037 and 1.1070

 

GBP/USD

 

 

Main trend Short-term period Medium-term period

Bearish Bearish

Changes in the open interest + 526 ? + 470 ?

Closest resistance levels 1.2266; 1.2301; 1.2322; 1.2349

Closest support levels 1.2205; 1.2182; 1.2153; 1.2119

Trading recommendations

Baseline scenario Short GBP/USD below 1.2205, with target points at 1.2182 and 1.2153

Alternative scenario Moving above 1.2266 can be considered as a signal to Buy the pair, with target at 1.2301 and 1.2322

 

USD/JPY

 

 

Main trend Short-term period Medium-term period

Bullish Neutral

Changes in the open interest + 53 ? + 259 ?

Closest resistance levels 104.78; 105.08; 105.29; 105.60

Closest support levels 104.67(?); 104.44; 104.19; 103.86

Trading recommendations

Baseline scenario Long USD/JPY above 104.78, with the target points at 105.08 and 105.29

Alternative scenario Moving below 104.67 can be considered as a signal to sell the pair, with target at 104.44 and  104.19

 

USD/CAD

 

 

Main trend Short-term period Medium-term period

Bullish Bullish

Changes in the open interest + 101 ? - 9 ?

Closest resistance levels 1.3425; 1.3452; 1.3490; 1.3548

Closest support levels 1.3383; 1.3353; 1.3300; 1.3231

Trading recommendations

Baseline scenario Long USD/CAD above 1.3425, with the target points at 1.3452 and 1.3490

Alternative scenario Moving below 1.3383 can be considered as a signal to sell the pair, with target at 1.3353 and 1.3300

 

More:

https://fxbazooka.com/analytics/11123

[riki143]

EUR/USD: going to Senkou Span B

11/1/2016

 

Technical levels: support – 1.0970; resistance – 1.1000, 1.1040.

 

Trade recommendations:

 

1. Buy — 1.0970; SL — 1.0950; TP1 — 1.1040; TP2 – 1.1060.

 

Reason: golden cross of the rising Tenkan-sen and Kijun-sen; bearish character of Ichimoku Cloud, but  Senkou Span A is rising; the prices are inside the Cloud.

 

 

More"

https://fxbazooka.com/analytics/11125

[riki143]

AUD/USD: unexpected start of bulls

11/1/2016

 

Technical levels: support – 0.7620, 0.7650; resistance – 0.7680.

 

Trade recommendations:

 

1. Buy — 0.7650; SL — 0.7630; TP1 — 0.7710; TP2 — 0.7740.

 

Reason: narrowing bearish Ichimoku Cloud; dead cross of Tenkan-sen and Kijun-sen, but the narrowing channel of the lines; the prices are in positive zone.

 

 

More:

https://fxbazooka.com/analytics/11126

[riki143]

USD/JPY: bulls wants to continue uptrend

11/1/2016

 

Technical levels: support – 104.80; resistance – 105.20, 105.70.

 

Trade recommendations:

 

1. Buy — 105.00; SL — 104.80; TP1 — 105.70; TP2 — 106.10.

 

Reason: bullish Ichimoku Cloud and rising Senkou Span B; golden cross of Tenkan-sen and Kijun-sen; the prices are fixed over Tenkan and Kijun.

 

 

More:

https://fxbazooka.com/analytics/11127

[riki143]

Your volatility calendar for November

11/1/2016

 

Wednesday, Nov. 2 at 20:00 EET (Eastern European Time (EET) is time displayed in MetaTrader4. During Daylight-Saving Time, EET is 3 hours ahead of Greenwich Mean Time (GMT +3). During Standard (Winter) Time, EET is 2 hours ahead of GMT (GMT +2))

 

FOMC Meeting

 

The US Federal Reserve is not expected to change interest rates at this meeting. Never the less, the event can still make market players nervous and provoke sharp moves of the US dollar versus other currencies. Traders will study FOMC statement for clues to the central bank’s plans for future. The release is scheduled on 20:00 EET.

 

 

Thursday, Nov. 3 (14:00 EET)

 

Bank of England’s Meeting & Press Conference

 

The Bank of England's Monetary Policy Committee members will announce the results of their vote on the interest rates and other policy tools at 14:00 EET. Then the BOE Governor Mark Carney will comment the Committee’s decision and answer the reporters’ questions. Volatility is usually observed during the meeting and the press conference. Beware of the changes in the movement of GBP/USD and EUR/GBP.

 

Friday, Nov. 4 (14:30 EET)

 

US Non-Farm Payrolls

 

The release of the Non-Farm Payrolls report at 14:30 EET is perhaps the most volatile event of the week. Highlight November 4 in your calendar, as NFP is a major profit/troublemaker indicator that represents the overall number of paid workers in the US excluding farm and government employees, as well as people working for nonprofit organizations. The Fed closely watches this report to define its interest rate. Last report figures fell short of expectations (only 156K jobs were created instead of forecasted 171K). Don’t forget about other important releases coming out on November 4 – trade balance, unemployment rate, and average hourly earnings – they could also influence the USD exchange rate.

 

 

 Tuesday, Nov. 8 (All day)

 

US Presidential Election

 

US Presidential election is certainly the key event of the month. The main candidates are Democratic nominee Hillary Clinton and her Republican counterpart Donald Trump. Prepare for the enormous, frantic fluctuations of quotes on your trading desk, as markets are going to react regardless of the election outcome. 

 

 

Wednesday, Nov. 9

 

RBNZ Meeting & Press Conference (22:00 EET)

 

The Reserve Bank of New Zealand board will announce its decision on the interest rate at 22:00 EET. We will also receive the report that brings us up to date on the central bank’s monetary policy and inflation targets. The RBNZ Governor Graeme Wheeler will speak at the press conference, which starts at 23:00 EET. Wheeler’s comments sometimes create heavy market volatility. Beware of this while trading NZD/USD.

 

Tuesday, Nov. 15

 

British Inflation (11:30 EET)

 

The UK consumer price index due at 11:30 EET is an important indicator for the Bank of England. The higher the growth of consumer prices is, the harder it becomes for the BOE to keep interest rates low. The central bank’s policy, in turn, has a direct impact on the pound. GBP/USD and EUR/GBP should react to the CPI release.

 

 

US Retail Sales (14:30 EET)

 

US retail sales provide valuable information on the nation’s economic performance and show whether the nation is ready to raise interest rates or not. The indicator will be released at 15:30 EET and should be watched by those who have positions in the US dollar.

 

Thursday, Nov. 17 (14:30 EET)

 

US Inflation

 

Watch the US consumer price index release at 15:30 EET as It could influence the USD valuation in relation to other currencies. The index measures average price of various goods and services and compares it with the previous sampling. Inflation is one of the indicators that Federal Reserve’s members watch to define the interest rate. So, the market will react to any deviations from the forecasted figures.

 

Wednesday, Nov. 23

 

FOMC Meeting Minutes (21:00 EET)

 

The minutes of the US Federal Reserve’s November meeting due at 21:00 EET will be important for all currency pairs containing the US dollar. The market will want to know where the members of the Federal Open Market Committee (FOMC) stand and whether they are prepared to raise the federal fund's rate in December. Hawkish minutes will support USD, while dovish minutes will be negative for the American currency.    

 

 

Friday, Nov. 25 (11:30 EET)

 

Second Estimate of British GDP

 

The UK Q3 GDP is released for the second time with adjustments at 11:30 EET. The data will provide more information on how British economy is coping in the aftermath of the Brexit vote. The indicator will influence the exchange rate of the British pound.

 

Tuesday, Nov. 29 (14:30 EET)

 

US Prelim GDP

 

This is the second estimate of the US economic performance in Q3. Deviations from the forecast level will have a significant impact on the US dollar. The indicator will be published at 15:30 EET.

 

Wednesday, Nov. 30

 

OPEC Meetings

 

The members of the Organization of the Petroleum Exporting Countries reached a preliminary agreement to limit the group’s daily production to between 32.5 million to 33 million barrels a day at the end of September. On November 30, the oil exporters meet in Vienna to define the levels of production for each country. OPEC encompasses 40% of the world’s oil supply, so traders will be closely watching this meeting to find clues on which way oil prices will go. The meetings are usually closed to the press, but senior officials are open to the reporters and willingly answer questions throughout the day. A formal statement, the cartel’s objectives and takeaways from the discussions are usually released after the meeting, but the volatility will be surely sensed during the whole day.

 

 

More:

https://fxbazooka.com/analytics/11128

[riki143]

EUR/USD: bulls going to deliver new high

11/1/2016

 

 

The 55 Moving Average acted as a resistance, so the price is consolidating. Therefore, the pair is likely going to rise towards the nearest resistance at 1.1001. If a pullback from this level happens, there’ll be an option to have a bearish correction.

 

 

We’ve got a consolidation near the 34 Moving Average. So, the market is likely going to rise in the direction of the closest support at 1.1004. At the same time, if a pullback happens, bears will probably try to deliver a decline.

 

More:

https://fxbazooka.com/analytics/11129

[riki143]

GBP/USD: "Rectangle" going to move on

11/1/2016

 

 

We’ve got a “Rectangle” pattern, so the current consolidation is likely going to be continued. The main intraday target is the 55 Moving Average. If this line acts as a resistance, bears will have a chance to reach a support at 1.2089.

 

 

There’s a “V-Bottom” pattern, which led to the current bullish movement in the direction of a resistance at 1.2248. So, after a local correction, bulls are likely going to reach the next resistance at 1.2271 – 1.2297.

 

More:

https://fxbazooka.com/analytics/11130

[riki143]

EUR/USD: "Advance Block" stopped buyers

11/1/2016

 

 

We’ve got a bullish “Three Methods” pattern, so the market is likely going to continue rising in the short term. As we can see on the Daily chart, there isn’t any reversal pattern so far. In this case, bulls are likely going to move on towards the nearest resistance level.

 

 

There’s an “Engulfing” pattern, which has been confirmed. Also, we’ve got an “Advance Block” pattern. If it confirms, there’ll be an opportunity to have a bearish correction towards the Moving Averages.

 

More:

https://fxbazooka.com/analytics/11132

[riki143]

USD/JPY: consolidation going to move on

11/1/2016

 

 

There’s a “Harami” pattern, which has been confirmed enough. Therefore, the market is likely going to test the closest resistance. If a pullback from this level arrives, bears will probably try to deliver a local decline. As we can see on the Daily chart, here’s a “Harami” at the last high, but this pattern doesn’t have a confirmation. So, it’s likely to see a local upward correction and a possible decline afterwards.

 

 

The “Window” acted as a support, so we’ve got a pullback. Also, there’s an “Engulfing” pattern. If it confirms, the pair is likely going to test the nearest support line, which could be a departure point to another upward movement.

 

More:

https://fxbazooka.com/analytics/11133

[riki143]

“What if analysis” of markets after presidential election

11/1/2016

 

As the most acrimonious US election is drawing to a close, financial markets keep fingers crossed for Hillary Clinton as she could maintain the status quo, whereas Trump’s victory would resemble the aftermath of the UK’s vote to leave the European Union. Controversy over Hillary Clinton’s e-mails could cause a fundamental shift in the presidential race and spread panic among investors. So, we decided to give you some prompts ahead of November 8 on what could happen with markets after the election. 

 

 

 

 

Written on the basis of Bloomberg's article

 

More:

https://fxbazooka.com/analytics/11134

[riki143]

AUD/USD reversed from support area

11/1/2016

 

AUD/USD reversed from support area

Next buy targets - 0.7720 and 0.7800

AUD/USD recently reversed once again from the support area lying between the support level 0.7600 (which stopped the earlier (a)-wave in October) and the 50% Fibonacci correction of the previous upward impulse from the middle of September.  The upward reversal from this support area stopped the ©-wave of the earlier minor ABC correction (ii).

 

AUD/USD is expected to rise to the next buy target at the key resistance level 0.7720 (which has been reversing the pair from August) – the breakout of which can lead to further gains toward the next buy target at 0.7800 (which stopped the earlier primary impulse wave ? in April).

 

 

More:

https://fxbazooka.com/analytics/11135

[riki143]

AUD/JPY broke round resistance level 80.00

11/1/2016

 

AUD/JPY broke round resistance level 80.00

Next buy target - 81.40

AUD/JPY continues to rise after the earlier breakout of the round resistance level 80.00, which has been steadily reversing the pair from the middle of last month (as can be seen from the daily AUD/JPY chart below). The breakout of the resistance level 80.00 accelerated the active minor impulse wave 3, which belongs to the intermediate ©-wave from the middle of September (which is itself a part of the primary wave ?-wave from the end of June).

 

AUD/JPY is expected to rise to the next buy target at the resistance level 81.40 (top of the previous waves 4 and (A) and the forecast price for the completion of the active impulse wave 3).

 

 

More:

https://fxbazooka.com/analytics/11136

[riki143]

EUR/USD & Fed interest rate decision: Will we see a 

 

top in the Euro today?

11/2/2016

 

Today at 18:00 GMT we’ll have the latest Federal 

 

Reserve interest rate decision’s meeting before US 

 

elections due on next week. Markets had been pricing a 

 

possible rate hike by the central bank in December’s 

 

meeting, as the odds are still higher. However, recent 

 

Clinton and Trump’s headlines have been driving the 

 

moves in the US dollar across the board, meaning that 

 

is highly likely today’s meeting won’t be a huge market 

 

mover. However, traders will be looking for hints about 

 

the current situation of the Federal Reserve and it’s 

 

willingness to raise rates or not in December.

 

Our technical view for EUR/USD at H4 chart is still 

 

bearish, despite the massive buying that the pair had 

 

been riding during the week. Currently, it’s expected 

 

to make a small pullback around 1.1056, where it can 

 

test the support level of 1.0992. However, EUR/USD 

 

could test the bearish trend line before to take a 

 

decisive move. In the scenario that the Fed doesn’t 

 

bring clear hints for a possible hike in December, the 

 

pair may cling up to reach the resistance level of 

 

1.1137, which is above the 200 SMA.

 

 

More:

 

https://fxbazooka.com/analytics/11137

[riki143]

GBP/USD: pound took up "let's wait and see" attitude

11/2/2016

 

On the GBP/USD daily chart, quotes continue to consolidate in the range of 1,211-1,232. Breakout of the upper boundary of this range will create prerequisites for correction in the direction of 1,248. Alternatively, a successful test of support could cause the pound to fall towards 1,188.

 

 

On the GBP/USD hourly chart, there is a formation of expanding wedge. It will be formed if quotes update the maximum at point 3. Traders should wait for the moment when wave 4-5 ends. The next correction towards 23.6%, 38.2% and 50% Fibonacci retracement levels could create prerequisites for opening long positions.

 

Recommendation: out of the market. 

 

More:

https://fxbazooka.com/analytics/11138

[riki143]

EUR/USD: bears retreat, but don't give up

11/2/2016

 

On the EUR/USD daily chart, "bulls" managed to test the important resistance levels at 1,096 and 1,104. However, "bears" will continue to keep the situation under control as long as quotes remain below the 1,1255-1,131 range (78,6-88,6% Fibonacci retracement levels from the AD wave). The main strategy is to increase sales as price rises.

 

 

On the EUR/USD hourly chart, the further dynamics in the movement of this pair will depend on the ability of buyers to test the resistance at 1.1113. There is a level of 61.8% of the last descending wave. In the vicinity of the 61.8% level, there are upper boundary of the "bearish" trading channel and target 127.2% of the "Crab" inverted pattern.

 

 

Recommendation: SELL 1,1115 SL 1,117 TP 1,095. 

 

More:

https://fxbazooka.com/analytics/11139

[riki143]

Morning brief for November 2, 2016

11/2/2016

 

The US dollar has weakened yesterday in relation to other major currencies on the investors’ anxiety over a possible Trump victory. Recent polls showed that sharp-tongued Republican drew ahead of Hillary Clinton by 1-2 points. US economic data were mixed: construction spending was disappointing (-0.4% against the forecasted +0.5%), but ISM manufacturing and Markit PMI went ahead of expectations.

 

The euro rose to a three-week high (1.1070). EUR/USD still continues its rally. The tension will return in markets later today as the Federal Reserve holds its policy meeting and announces its decision on the interest rate.  

 

USD/JPY slumped from yesterday’s high (105.19) to 103.75 on the US election jitters. It seems that “bullish” trend has ended; price action is deemed to a pullback as investors will be forcing money out of riskier assets (yen is a safe-haven asset). Bank of Japan left rate on hold yesterday and pushed back the time frame for hitting the inflation target.

 

Aussie weakened as the number of building approvals fell 8.7%; it seems that constructing activity, a main trigger of the recent upward AUD/USD movement, is losing its momentum. At the present time, the pair is trading around the 0.7630 level. Yesterday Aussie almost reached its key resistance line located at 0.7700 as the RBA held its interest rate and didn’t recourse to easing. Better China data also was a boost.

 

NZD/USD keeps growing due to the weakening of the greenback and better-than-expected labor market data released yesterday. Earlier this morning we got RBNZ inflation expectations indicator which didn’t deviate from the forecasted number. The Kiwi almost reached 0.7235 level located against 50-day MA.

 

The undertone for GBP/USD has improved recently with Mark Carney remaining at the post of the BOE’s governor and better-than-expected/neutral economic releases coming from the UK. We continue to expect this currency pair moving sideways between 1.2080 and 1.2350 levels. Watch the construction PMI and keep in focus the FOMC’s meeting later today.

 

More:

https://fxbazooka.com/analytics/11140

[riki143]

EUR/USD: euro may return into the Cloud

11/2/2016

 

Technical levels: support – 1.1050, 1.1000; resistance – 1.1060, 1.1090.

 

Trade recommendations:

 

1. Sell — 1.1090; SL — 1.1110; TP1 — 1.1050; TP2 – 1.1000.

 

Reason: golden cross of the rising Tenkan-sen and Kijun-sen; bearish character of Ichimoku Cloud, but  Senkou Span A is rising up; the prices are in positive zone, but the market is overbought.

 

 

More:

https://fxbazooka.com/analytics/11144

[riki143]

AUD/USD: on strong support

11/2/2016

 

Technical levels: support – 0.7590, 0.7620; resistance – 0.7640.

 

Trade recommendations:

 

1. Buy — 0.7630; SL — 0.7600; TP1 — 0.7710; TP2 — 0.7740.

 

2. Sell — 0.7610; SL — 0.7630; TP1 — 0.7540; TP2 — 0.7510.

 

Reason: narrow weak bullish Ichimoku Cloud; new golden cross of Tenkan-sen and Kijun-sen; the prices are on the strong support of Kijun-sen and Senkou Span B.

 

 

More:

https://fxbazooka.com/analytics/11145

[riki143]

USD/JPY: prices are back into the Cloud

11/2/2016

 

Technical levels: support – 103.35, 103.00; resistance – 104.00, 104.30.

 

Trade recommendations:

 

1. Buy — 103.35; SL — 103.15; TP1 — 104.00; TP2 — 104.30.

 

Reason: narrowing bullish Ichimoku Cloud and rising Senkou Span B; new dead cross of Tenkan-sen and Kijun-sen; the prices are in the Cloud.

 

 

More:

https://fxbazooka.com/analytics/11146

[riki143]

Key option levels for Wednesday, November 2nd

11/2/2016

 

EUR/USD

 

 

Main trend Short-term period Medium-term period

Bullish Bearish

Changes in the open interest + 233 858 ? + 80 666 ?

Closest resistance levels 1.1097; 1.1136; 1.1170; 1.1211

Closest support levels 1.1046; 1.1020; 1.0985; 1.0943

Trading recommendations

Baseline scenario Long EUR/USD above 1.1097, with target points at 1.1136 and 1.1170

Alternative scenario Moving below 1.1046 can be considered as a signal to Sell the pair, with target at 1.1020 and 1.0985

 

GBP/USD

 

 

Main trend Short-term period Medium-term period

Bearish Bearish

Changes in the open interest + 1 201 ? + 612 ?

Closest resistance levels 1.2276; 1.2300; 1.2320; 1.2346

Closest support levels 1.2258(40?); 1.2212; 1.2188; 1.2158

Trading recommendations

Baseline scenario Short GBP/USD below 1.2258, with target points at 1.2212 and 1.2188

Alternative scenario Moving above 1.2276 can be considered as a signal to Buy the pair, with target at 1.2300 and 1.2320

 

USD/JPY

 

 

Main trend Short-term period Medium-term period

Neutral Neutral

Changes in the open interest + 884 ? + 1 607?

Closest resistance levels 103.85; 104.05; 104.23; 104.50

Closest support levels 103.47; 103.21; 102.85; 102.43

Trading recommendations

Baseline scenario Long USD/JPY above 103.85, with the target points at 104.05 and 104.23

Alternative scenario Moving below 103.47 can be considered as a signal to sell the pair, with target at 103.21 and  102.85

 

USD/CAD

 

 

Main trend Short-term period Medium-term period

Bullish Bullish

Changes in the open interest + 591 ? + 549 ?

Closest resistance levels 1.3387; 1.3419; 1.3464; 1.3534

Closest support levels 1.3362; 1.3340; 1.3296; 1.3229

Trading recommendations

Baseline scenario Long USD/CAD above 1.3387, with the target points at 1.3419 and 1.3464

Alternative scenario Moving below 1.3362 can be considered as a signal to sell the pair, with target at 1.3340 and 1.3296

 

More:

https://fxbazooka.com/analytics/11147

[riki143]

EUR/USD: bulls broke Moving Averages

11/2/2016

 

 

The price is rising, but bulls faced a resistance at 1.1087, so we’ve got a local correction. Therefore, the market is likely going to reach the next resistance at 1.1103 in the short term. If a pullback from this level happens, there’ll an option to have a decline towards a support at 1.1038.

 

 

We’ve got a “Pennant” on the one-hour chart, which has been broken by the bullish rally. So, the price is likely going to continue rising towards the nearest resistance at 1.1103 during the day. At the same time, if we see a pullback from this level, bears will probably try to deliver a correction.

 

More:

https://fxbazooka.com/analytics/11148

[riki143]

GBP/USD: flat inside "Rectangle"

11/2/2016

 

 

There’s a “Rectangle”, so the current consolidation is likely going to be continued in a range of this pattern. So, bulls are likely going to test the 55 Moving Average. If a pullback from this line arrives, there’ll be an opportunity to have a decline towards a support at 1.2089.

 

 

The price is consolidating between the nearest Moving Average and the closest resistance at 1.2271. It’s likely that this flat is going to end soon by a possible bullish price movement. However, there’s an opportunity to have a bearish price movement in the direction of a support at 1.2226 afterwards.

 

More:

https://fxbazooka.com/analytics/11149

[riki143]

Markets are kindly disposed towards Aussie, but for how long?

11/2/2016

 

The Aussie is trading higher against other major currencies. There are at once several contributors to the recent AUD growth.

 

Perhaps the most significant one is tremendous commodity prices rises that delivered a boost to Australia’s terms of trade.  Yesterday Reserve bank of Australia released its annual index of commodity prices. It indicated a sharp increase (by 16% in SDR terms) in the selling price of exported commodities. Over the year, coking coal prices have surged 150%, thermal coal is up 50%; iron ore edged up by 6.3%. All these commodities are the key units of Australian export.

The market concerns over the RBA’s rate cut dissipated yesterday as the bank left its current policy stance unchanged.

The China’s manufacturing data went ahead of expectations yesterday.  The official manufacturing PMI came in at 51.2 for October instead of forecasted 50.4. Caixin manufacturing PMI rose to 51.2 in October, the best improvement since March 2011.

The rationale for AUD appreciation in relation to USD. The US dollar after rising against G10 currencies over the past three months finally started to roll back on the market’s anxiety over a Trump victory in the US presidential election. Aussie, unlike other currencies, managed to withstand the greenback’s pressure.

 

 

Trump’s victory would lead to increased uncertainty and deterioration in the market’s risk sentiment. Aussie should hold up better than other currencies given the situation in the commodity market, acceleration of China’s economic growth and favorable monetary policy of the Reserve Bank of Australia. In addition, if Trump by good/bad fortune manages to win, the Aussie may get an additional boost as the Fed could disregard the need for the rate hike in December.

 

According to the average forecast of analysts, the currency should fell down to 0.74 by the end of this year (the forecasts compiled and estimated by Bloomberg). UniCredit and ING Groep NV are more positive in their predictions for AUD. They believe that it may rise to the 0.80 level by the end of this year.

 

Those who are planning to trade Aussie in the longer-term should think of the possible downside in commodity prices, as they are high enough to attract additional supply to the market. The recent boom in coal prices is not expected to be sustained as the surge has been excessive, so prices should retreat from the present levels in the longer term. Westpac currency strategist Sean Callow believes that drop in commodity prices could drag Australian dollar below the 0.70 mark by the fourth quarter of 2017. 

 

More:

https://fxbazooka.com/analytics/11150

[riki143]

AUD/NZD broke support level 1.0600

11/2/2016

 

AUD/NZD broke support level 1.0600

Next sell target - 1.0470

AUD/NZD continues to fall sharply inside the minor impulse wave (iii), which belongs to impulse 3 - which started earlier – when the pair reversed down from the resistance zone lying between the long-term resistance level 1.0740 (which has been reversing the price from May) and the 50% Fibonacci correction of the previous downward impulse from April.

 

Having recently broken the support level 1.0600 (low of the previous impulse (i)) - AUD/NZD is expected to fall further in the accelerated impulse wave (iii) toward the next sell target at the support level 1.0470 (low of the previous wave ( and the target price for the completion of the active impulse wave (iii)).

 

 

More:

https://fxbazooka.com/analytics/11151