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Old 19-10-2015, 13:06
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Default Re: Hotforex.com - Market Analysis and News.

Date : 19th October 2015.

CURRENCY MOVERS OF 19th October 2015.




AUDUSD, Daily

AUDUSD 5-day change is lower against other major currencies in what seems to be a pause in the recent price rally from the September 29th low (0.6936) to the Oct 12th high (.7380). Daily technical observations spots a bullish 10,50 SMA cross, consecutive higher tops and bottoms on price from September 4th – October 12th (0.69 L / .7380 H ) and the fact that current price is trading above the 10,50 SMA brings me to the conclusion that price remains in a short term uptrend. If today’s low on price holds above the 0.7230 area this could create a lower top above last week’s low (0.72) that may open up the way towards 0.7380; my ultimate short term price objective near 0.7440. However, traders should be on alert for any break below the 0.72 support that may support a deeper price retracement from the September Low to October’s current high with relevant support in this case spotted around the 0.71-0.7110′s.



GBPAUD, Weekly

GBPAUD weekly chart analysis, price touched a six year high at 2.24 late August and since has made a series of lower tops on price. Current price is trading below both the tentative downward slopping trend line, and the 10 period SMA. Stochastic oscillator analysis spots a bullish cross below the 20 line indicating a possible pause in the current downward price direction. My conclusion for the weekly chart trader is to sell into any strength higher up from current price, ideally near the 2.14 area for a 2.03 target.

FXPAIR : GBPAUD
SUPPORTS: 2.03
RESISTANCES: 2.24




ECONOMIC WEEK AHEAD



Main Macro Events This Week

* United States: Housing releases dominate the economic calendar. The sector has disappointed with relatively moderate growth despite the improved job market and still low mortgage rates. This week’s reports aren’t likely to alter that assessment. The NAHB homebuilder sentiment index (Today) is projected steady at 62 in October, the best level since 2005. September housing starts (Tuesday) are seen edging up to a 1.130 mln pace, rebounding from a 7.1% cumulative decline in July and August. Existing home sales for September (Thursday) are projected rising 1.7% to a 5.40 mln clip to unwind part of the 4.8% August drop. The August FHFA home price index (Thursday) and weekly MBA mortgage numbers (Wednesday) are also slated. The only other report of note is the flash Markit manufacturing PMI for October. Chair Yellen (Tuesday) will give brief welcome remarks at a Labor Department event. Governor Brainard (Today) will discuss removing unnecessary regulation. Dudley and Powell (Tuesday) are speaking at a money market conference. And Governor Powell will also speak on market liquidity.

* Canada: The Canadian calendar is highlighted by the Bank of Canada’s rate announcement (Wednesday) and the Monetary Policy Report. We expect no change to the current 0.50% setting, alongside a cautiously constructive outlook for growth and inflation that is supportive of no change in rates for an extended period. The Federal election will be held today. As for economic data, the September CPI is seen slowing to a 1.2% y/y pace, but with a flat month comparable reading as a drop in gasoline prices competes with the typical seasonal jump in clothing prices. The Bank of Canada’s core CPI is expected to nudge higher to a 2.2% y/y rate in September following the 2.1% clip in August. Retail sales are expected to rise 0.2% in August after the 0.5% gain in July. Wholesale shipments (Tuesday) are seen rising 0.3% in August after the flat reading in July.

* Europe: All eyes will be on the ECB this week. Eurozone inflation is back in negative territory and uncertainty about the global growth outlook is rising, which is putting intense pressure on Draghi to extend or expand the QE program. However, the ECB has already provided an unprecedented amount of stimulus and the measures have eased credit conditions and bolstered confidence. Inflation is expected to pick up again toward the end of the year and with domestic demand robust, we don’t see the risk of a deflationary spiral. What the Eurozone needs are structural reforms, not an ever-easy policy stance. And in this situation, Draghi is likely to maintain the wait and see approach, at least for now, although his comments are likely to be sufficiently dovish to keep markets happy, even if a steady hand policy will likely disappoint some and push up yields, at least temporarily. The economic calendar this week focuses on preliminary PMI readings for October (Friday), which we expect to show a further slowdown in the pace of expansion in both services and manufacturing. The EMU’s manufacturing reading is seen falling to 51.7 from 52.0 and the services reading to 53.4 from 53.6 in the previous month. Preliminary Eurozone consumer confidence numbers for October are also expected to head south with growing concerns about the global growth outlook starting to spook consumers. The Eurozone also has BoP and current account data, Italian orders numbers and German PPI inflation.

* United Kingdom: The week ahead is pretty quiet, which will leave the focus of sterling markets on external data and developments and Chinese growth data. UK government borrowing (Wednesday) is the first data of note, followed by official retail sales data for September (Thursday).

* China: Growth was expected to slow to a 6.5% y/y pace, from the 7.0% clip seen in Q1 and Q2 but came in at 6.9%. The figure fell short of the 7.0% official forecast, but was so slight that the damage on global market sentiment remained negligible. Even the bigger drop was not expected to weigh on stocks due to the “good news is bad news” psychology and hopes of more PBoC stimulus. The better than expected data may not help sentiment much though, as the Chinese data are often viewed to be doctored. September industrial production (Today) is forecast to dip to 6.0% y/y from 6.2% in August. September retail sales (Today) are penciled in at 10.7% y/y gain, down slightly from the prior 10.8% outcome.

* Japan: In Japan, the September trade report (Wednesday) also is eagerly awaited for growth insights though balance is likely to be impacted significantly by weakness in imports (y/y) amid low energy prices. Indeed, the JPY 569.4 bln August deficit is expected to reverse sharply to a surplus of JPY 50 bln. The pace of export growth is seen holding steady, though the increasingly sluggish growth in the region may limit exports as well. The August all-industry index (Wednesday) is expected to fall 0.4% m/m, as compared to the prior 0.2% gain.

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Janne Muta
Chief Market Analyst
HotForex
&
John Knobel
Senior Currency Strategist
HotForex


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