Sample Category Title

Key Highlights

• The Aussie Dollar made a nice upside move above 0.7900-0.7950 against the US Dollar.
• There is a crucial bullish trend line forming with support at 0.7950 on the 4-hours chart of AUD/USD.
• Australia's Construction Work Done rose by 9.3% in Q2 2017, more than the forecast of 1%.
• Australia's Building Permits declined by 1.7% (MoM), less than the forecast of -5%.

AUD/USD Technical Analysis

The Aussie Dollar is in a solid uptrend from the 0.7800 low against the US Dollar. The AUD/USD pair is now comfortably placed above 0.7950 and looking to test 0.8000.

Looking at the 4-hours chart, there is a crucial bullish trend line forming with support at 0.7950. The pair recently tested a resistance trend line at 0.7996 and is currently correcting lower.

On the downside, an initial support sits at the 38.2% Fib retracement level of the last wave from the 0.7905 low to 0.7996 high.

However, the most important support is near 0.7950, which is also the 50% Fib retracement level of the last wave from the 0.7905 low to 0.7996 high. The 0.7950 level was a resistance earlier and now likely to act as a support.

Once the current correction is complete, the AUD/USD pair is likely to resume its upside with a break above 0.8000.

Australia's Building Permits and Construction Work

Today, Australia's Building Permits report for July 2017 was released by the Australian Bureau of Statistics. The forecast was slated for a decline of 5% in permits compared with the previous month.

The actual result was better, as the decline was 1.7%. However, it was disappointing compared with the last revised increase of 11.7%. In terms of the yearly change, there was a decrease of 13.9%, less than the forecast of -16.6%, but more than the last -2.3%.

The report added that:

The trend estimate of the value of total building approved rose 1.3% in July and has risen for six months. The value of residential building was flat. The value of non-residential building rose 3.1% and has risen for six months.

The Construction Work Done report for Q2 2017 was also published today. The forecast was slated for a rise of 1% in Q2 2017. The actual was a lot better, as there was a rise of 9.3%, more than the last revised 0.9%.

The overall outcome was positive, and would help AUD/USD to remain above 0.7950 in the near term. Today,s US GDP release for Q2 2017 (Prelim) is forecasted to post an annual rise of 2.7%, which could impact the US Dollar and all major pairs in the near term.

AUDUSD has moved back into a neutral phase following a strong rebound off 0.7807 in mid-August. The pair is struggling to sustain gains and paused its recent rise just below the key 0.8000 level. While the overall medium-term market structure remains bullish, the shorter-term view is for a consolidation phase between 0.7865 and 0.8000.

Momentum signals are mixed but mostly neutral. Both RSI and MACD remain in their respective bullish territory. Meanwhile, the moving averages are positively aligned after the crossover of the 50-day MA above the 200-day MA. These factors give a broadly bullish technical picture and there are no signs yet of a change in the uptrend from 0.7328 to 0.8065 (May to July rise).

There is scope to extend higher if momentum picks up. A sustained break of strong resistance at 0.8000 could see a re-test of the July 27 high at 0.8065 and from this point the odds rise for a resumption of the uptrend to target the next major high at 0.8162.

To the downside, immediate support is expected at around the 23.6% Fibonacci retracement level of the rise from 0.7328 to 0.8065, at 0.7888. Below this, AUDUSD would likely come under pressure to drop to the 38.2% Fibonacci retracement level at 0.7780. A move below the 50% Fibonacci at 0.7695 would indicate a change in the medium-term bullish bias.

Based on the current market structure, the near-term remains neutral and the medium-term is bullish.

EUR/USD

Current level - 1.1970

Yesterday's reversal at 1.2070 has initiated a corrective pullback and the intraday bias is slightly negative for a tight test of 1.1909 support zone. The latter is expected to provide a reliable base for another upswing on the higher frames, towards 1.2160. Intraday resistance lies at 1.2000.

USD/JPY

Current level - 109.78

The intraday bias is positive after the failure at 108.20, with a risk of an intraday rise towards 110.30. Minor intraday support lies at 109.40, followed by the crucial 109.00. The latter is a trigger for a renewal of the slide towards 107.00.

GBP/USD

Current level - 1.2926

The pullback after 1.2980 should be considered corrective and despite the risk of a test around 1.2846-70, the overall bias is still positive, for 1.3050. Intraday allow a dip through 1.2914 towards 1.2870-46 area.

Daily Pivots: (S1) 140.49; (P) 141.25; (R1) 142.50; More

Intraday bias in GBP/JPY remains neutral for the moment. Near term outlook stays bearish as long as 143.18 resistance holds and deeper decline is in favor. Below 139.29 will target 135.58 key support level. At this point, price actions from 148.42 are seen as a sideway consolidation pattern. Hence, we'll expect strong support from 135.58 to contain downside and bring rebound. Meanwhile, break of 143.18 will indicate short term reversal and turn bias back to the upside.

In the bigger picture, the sideway pattern from 148.42 is extending with another leg. We'd expect strong support from 135.58 and 50% retracement of 122.36 to 148.42 at 135.39 to contain downside. Medium term rise from 122.36 is still expected to resume later. And break of 38.2% retracement of 196.85 to 122.36 at 150.43 will carry long term bullish implications. However, firm break of 135.58/39 will dampen the bullish view and turn focus back to 122.36 low.

Daily Pivots: (S1) 130.15; (P) 130.88; (R1) 132.11; More...

Break of 131.39 resistance suggests that larger rally is resuming. Intraday bias remains on the upside for target 61.8% projection of 122.39 to 131.39 from 127.55 at 133.11 next. On the downside, below 130.44 minor support will turn intraday bias neutral and bring consolidations, before staging another rally.

In the bigger picture, the down trend from 149.76 (2014 high) is completed at 109.03 (2016 low). Current rally from 109.03 should be at the same degree as the fall from 149.76 to 109.03. Further rise is expected to 61.8% retracement of 149.76 to 109.03 at 134.20. Sustained break there will pave the way to key long term resistance zone at 141.04/149.76. Medium term outlook will remain bullish as long as 124.08 resistance turned support holds. However, firm break of 124.08 will argue that rise from 109.03 is completed and turn outlook bearish.

Daily Pivots: (S1) 1.4991; (P) 1.5082; (R1) 1.5143; More....

A temporary top is in place at 1.5173 and intraday bias is turned neutral first. We're holding on to the bullish view that correction from 1.5226 has completed with three waves down to 1.4421. Further rise is expected and above 1.5173 will target retesting 1.5226 first. Break there will resume whole rebound from 1.3624 and target 61.8% projection of 1.3624 to 1.5226 from 1.4421 at 1.5411 next. Outlook will remain unchanged as long as 1.4732 support holds.

In the bigger picture, we're holding on to the view that corrective decline from 1.6587 medium term has completed at 1.3624. Rise from 1.3624 is expected to extend to retest 1.6587. The corrective structure of the fall from 1.5226 is affirming this view. Above 1.5226 will target a test on 1.6587 key resistance. However, break of 1.4421 will dampen our view and would drag EUR/AUD lower to retest key support zone around 1.3624.

Daily Pivots: (S1) 0.9239; (P) 0.9273; (R1) 0.9299; More

We'd remain cautious on cautious on rejection from 0.9304 to extend the medium term consolidation pattern. Break of 0.9184 will turn bias back to the downside for pull back to 55 day EMA (now at 0.8970). However, sustained break of 0.9304 will confirm up trend resumption and pave the way to 0.9799.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. It's uncertain whether it is finished yet. But in case of another fall, we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside and bring rebound. Whole up trend from 0.6935 is expected to resume after consolidation from 0.9304 completes. Firm break of 0.9799 high will target 61.8% projection of 0.5680 to 0.9799 from 0.6935 at 1.1054.

Price increased in the early morning and should resume the upside momentum. Technically is expected to climb much higher after the false breakdown below the WL1 of the descending pitchfork and below the warning line (wl1) of the ascending pitchfork.

It's moving somehow sideways on the daily chart, but maintaining a bullish perspective for the upcoming period.

USD/JPY continues to move in range on the short term, failed to retest the downside line of this extended sideways movement, signaling that the bulls are still in the game and could redeem ground. Price is retesting the minor uptrend and could reach the second warning line (WL2) as well in the upcoming hours. A valid breakout above the WL2 will confirm a broader rebound on the Daily chart. I’ve drawn a minor ascending pitchfork, hoping that I’ll catch an upside momentum. Price retested the lower median line (lml) and now should climb higher.

Price climbs higher aggressively as the USD was weakened seriously by the USDX’s drop. AUD/USD is strongly bullish on the Daily chart, should approach and reach the 0.8065 swing high, only a failure to do this will signal an exhaustion and a potential decrease.

The pair rallies and seems motivated to jump above the 0.8000 psychological level in the upcoming hours.

The USDX has managed to rebound in the US session and to stay above the 92.00 psychological level, now is trading in the red again, but we may have a bounce back on the short term after the yesterday’s spike. The dollar index plunged through the 91.91 long term horizontal support, but failed to stay there and closed the day at 92.35 level.

The Aussie rallied also because the Australian Building Approvals dropped only by 1.7% in the previous month, less versus the 5.4% estimate, while the Construction Work Done rose by 9.3% in the second quarter, beating the 0.9% estimate.

You should keep an eye on the economic calendar because the US is to release high impact data in the afternoon, which could shake the markets.

Price moves higher after the retest of the lower median line (LML) of the major ascending pitchfork, It is approaching the 0.8065 highest high, where he may find resistance again. The retreat towards the LML was natural after the failure to reach and retest the median line (ml) of the ascending pitchfork. A failure to reach the mentioned static resistance will signal and exhaustion and a potential reversal.