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Australia’s Consumer Inflation Expectation Jumped In October
For the 24 hours to 23:00 GMT, the AUD rose 0.22% against the USD and closed at 0.7796.
LME Copper prices rose 0.7% or $44.0/MT to $6685.0/MT. Aluminium prices declined 0.4% or $9.0/MT to $2124.0/MT.
In the Asian session, at GMT0300, the pair is trading at 0.7809, with the AUD trading 0.17% higher against the USD from yesterday's close.
Data released overnight showed that Australia's consumer inflation expectation rose to 4.3% in October, following a reading of 3.8% in the previous month. Moreover, the nation's seasonally adjusted home loan approvals climbed 1.0% on a monthly basis in August, topping market expectations for an advance of 0.5%. In the previous month, home loan approvals had gained by a revised 2.8%.
The pair is expected to find support at 0.7782, and a fall through could take it to the next support level of 0.7756. The pair is expected to find its first resistance at 0.7824, and a rise through could take it to the next resistance level of 0.7840.
Looking forward, the Reserve Bank of Australia's Financial Stability Review report, due to release overnight, will garner significant market attention.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
Trade Idea : USD/JPY – Sell at 112.80
USD/JPY - 112.28
Most recent candlesticks pattern : N/A
Trend : Near term down
Tenkan-Sen level : 112.39
Kijun-Sen level : 112.33
Ichimoku cloud top : 112.41
Ichimoku cloud bottom : 112.39
Original strategy :
Sell at 112.80, Target: 111.80, Stop: 113.15
Position : -
Target : -
Stop : -
New strategy :
Sell at 112.80, Target: 111.80, Stop: 113.15
Position : -
Target : -
Stop : -
Although dollar has retreated after faltering below resistance at 112.59, as long as this week’s low at 111.99 holds, risk of another rebound to 112.70-75 (50% Fibonacci retracement of 113.44-111.99) cannot be ruled out, however, reckon 112.83-89 (yesterday’s high and 61.8% Fibonacci retracement) would limit upside and bring another decline later, below said support at 111.99 would add credence to our view that top has been formed at 113.44 and extend weakness to 111.75-80, then towards 111.47 support but oversold condition would limit downside and reckon 111.11 support would remain intact.
In view of this, we are looking to sell dollar on recovery as 112.83 resistance should limit upside and bring another decline. A break of indicated level at 112.83-89 would abort and signal low is formed, bring a stronger rebound to 113.10-20 but price should falter well below said last week’s high at 113.44.
Euro Trading On A Stronger Footing, Ahead Of The ECB President’s Speech
For the 24 hours to 23:00 GMT, the EUR rose 0.45% against the USD and closed at 1.1862.
The US Dollar traded in the negative territory against its major counterparts, after minutes of the September FOMC meeting revealed lingering concerns about persistently low inflation.
Minutes indicated that policymakers are tilting towards the prospects for another interest rate hike before this year-end. However, officials issued concerns that low inflation could not only be a temporary phenomenon and as such few believed that “some patience” was warranted in hiking interest rates in order to assess trends in inflation.
On the data front, the US JOLTS job openings dropped to a level of 6082.0K in August, higher than market expectations for a fall to a level of 6125.0K. JOLTS job openings had registered a revised reading of 6140.0K in the prior month. Moreover, the nation's MBA mortgage applications eased 2.1% in the week ended 06 October. In the previous week, mortgage applications had fallen 0.4%.
In the Asian session, at GMT0300, the pair is trading at 1.1873, with the EUR trading 0.09% higher against the USD from yesterday's close.
The pair is expected to find support at 1.1820, and a fall through could take it to the next support level of 1.1767. The pair is expected to find its first resistance at 1.1901, and a rise through could take it to the next resistance level of 1.1929.
Moving ahead, investors will keep a close watch on a speech by the European Central Bank (ECB) President, Mario Draghi, due later today. Traders would also eye the Euro-zone's industrial production data for August, slated to release in a few hours. Moreover, the US initial jobless claims and the monthly budget statement for September, both slated to release later in the day, will be on investors' radar.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
Pound Trading Higher In The Asian Session
For the 24 hours to 23:00 GMT, the GBP rose 0.2% against the USD and closed at 1.3229.
Meanwhile, UK’s Chancellor of the Exchequer, Philip Hammond, stated that Brexit has clouded Britain’s economic outlook and added that the Government is preparing for the potential of a “hard Brexit” in 2019.
In the Asian session, at GMT0300, the pair is trading at 1.3252, with the GBP trading 0.17% higher against the USD from yesterday’s close.
Overnight data indicated that Britain’s RICS house price balance remained unchanged at a level of 6.0 in September, compared to market expectations of a drop to a level of 4.0.
The pair is expected to find support at 1.3197, and a fall through could take it to the next support level of 1.3142. The pair is expected to find its first resistance at 1.3286, and a rise through could take it to the next resistance level of 1.3320.
Going ahead, traders will look forward to the Bank of England’s credit conditions survey report, due to release in a few hours.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
Japan’s Tertiary Industry Index Unexpectedly Declined In August
For the 24 hours to 23:00 GMT, the USD rose 0.1% against the JPY and closed at 112.49.
In economic news, Japan's preliminary machine tool orders recorded a rise of 45.3% YoY in September. In the previous month, machine tool orders had risen 36.2%.
In the Asian session, at GMT0300, the pair is trading at 112.42, with the USD trading 0.06% lower against the JPY from yesterday's close.
Early morning data indicated that Japan's tertiary industry index unexpectedly fell 0.2% in August, compared to a rise of 0.1% in the previous month and defying market consensus for an advance of 0.1%.
The pair is expected to find support at 112.14, and a fall through could take it to the next support level of 111.85. The pair is expected to find its first resistance at 112.65, and a rise through could take it to the next resistance level of 112.87.
The currency pair is trading above its 20 Hr moving average and showing convergence with its 50 Hr moving average.
Swiss Franc Extends Its Gains In The Asian Session
For the 24 hours to 23:00 GMT, the USD declined 0.14% against the CHF and closed at 0.9735.
In the Asian session, at GMT0300, the pair is trading at 0.9722, with the USD trading 0.13% lower against the CHF from yesterday’s close.
The pair is expected to find support at 0.9704, and a fall through could take it to the next support level of 0.9685. The pair is expected to find its first resistance at 0.9754, and a rise through could take it to the next resistance level of 0.9785.
With no macroeconomic releases in Switzerland today, investor sentiment would be governed by global macroeconomic news.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
Loonie Trading A Tad Higher In The Morning Session
For the 24 hours to 23:00 GMT, the USD declined 0.5% against the CAD and closed at 1.2455.
In the Asian session, at GMT0300, the pair is trading at 1.2454, with the USD trading marginally lower against the CAD from yesterday’s close.
The pair is expected to find support at 1.2421, and a fall through could take it to the next support level of 1.2388. The pair is expected to find its first resistance at 1.2509, and a rise through could take it to the next resistance level of 1.2564.
Ahead in the day, market participants will focus on Canada’s new housing price index for August.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
GBP/JPY Yen Demolished By Nikkei’s Rally
The GBP/JPY increased in the last days and now stands above the 148.46 static resistance (support turned into resistance). The Yen is punished by the Nikkei's rally and could depreciate further versus all its rivals, not only against the Pound. A minor consolidation will send the rate towards the 151.66 static resistance.
NZD/USD Breakout In Play
The NZD/USD jumped above the median line (ml) of the minor descending pitchfork and above the 61.8% retracement level. A valid breakout above these levels will signal a further increase on the short term. It could approach the upper median line (uml) of the minor descending pitchfork if the USDX will slide further.
Resistance could be found at the 0.7131 level and much higher at the 50% retracement level. I’ve said in a previous report that the rate could develop a Falling Wedge pattern, but this is far from being confirmed.
AUD/USD Bulls In Control
The AUD/USD rallies and extends the minor bounce back movement. Price climbed above a dynamic resistance line and tries to reach new obstacles on the short term. The AUD has taken full control on the short term as the USD is punished by the USDX’s aggressive drop. The dollar index continues to drop after the FOMC Meeting Minutes were released, but this could be only a temporary drop.
The Aussie received a helping hand from the Australian Home Loans, which has increased by 1.0% in August, more versus the 0.5% estimate, while the MI Inflation Expectations rose by 4.3%, more versus the 2.8% estimate.
You should be careful in the afternoon as the US is to release high impact data, the PPI is expected to increase by 0.4%, more versus the 0.2% in the previous reading period, while the Unemployment Claims could drop to 251K in the previous week.
Price rallied after the false breakdown below the 0.7755 static support and now is located above the median line (ml) of the minor descending pitchfork. Right now is pressuring the 38.2% retracement level and could reach the 0.7835 static resistance very soon.
A retest of the broken median line (ml) will confirm an increase towards the upper median line (uml) of the minor descending pitchfork. Price maintains a bearish perspective on the short term as long as is trading within the minor pitchfork’s body.
