Weekly Foreign Exchange Technical Report...2 AUDUSD Monthly View: The same count since May 2013. The rally from the 2001 low at .4776 to the 2011 high at 1.1081 completed a corrective

Institutional Banking and Markets

Weekly Foreign Exchange Technical Report

3rd of Sep 2015

Tony Sycamore

P: (02) 9117 0341

E: [email protected]

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AUDUSD

Monthly View: The same count since May 2013. The rally from the 2001 low at .4776 to the 2011 high at 1.1081 completed a corrective three wave rally which suggests the risk remains to the downside.

Trade idea: In last weeks update we were of the opinion a medium term low for the AUDUSD was either in or close by. After trading to a new low yesterday and combined with last nights reversal/loss of momentum candle, the odds have increased that a rally is close by and I would like to suggest the following trade in the AUDUSD. Buy a Tier 3 weighting here at .7046, with a sell stop placed initially at .6975. Given this is very much a counter trend trade, I will be looking to raise the stop loss rather quickly if the trade goes according to plan.

A break of .6975/50 would be an initial indication that the next leg lower ie a move towards .6500c is unfolding.

AUDUSD Monthly.

Source: Bloomberg, CBA

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AUDUSD


AUDUSD DAILY

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NZDUSD

Monthly View: The same longer term wave count identified in the AUDUSD is also evident in NZDUSD. The rally from the 2000 low of .3900 to the July 2014 high at .8836 appears to have completed a corrective three wave rally, which suggests risks are firmly to the downside.

Update: Unchanged - I think a medium term low is either in at the recent .6150 low, or close by. The big spikes in the charts after last week’s currency “flash crash” makes it difficult to hold a conviction view in the short term, however its worth remembering medium term targets have been reached.

NZDUSD Monthly


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NZDUSD


NZDUSD DAILY

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NZ TWI


NZTWI Weekly

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AUDNZD

Monthly View: Neutral

Update: Unchanged - while there remains a degree of interest rate support for the cross, the third chart below shows how the bounce in dairy prices has undermined support for a higher AUDNZD. For that reason, I will remain patient looking for a dip into the 1.0820/00 region to re-establish longs.

AUDNZD WEEKLY


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AUDNZD


AUDNZD DAILY

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AUDNZD


AUDNZD Vs CBA Terms of Trade Indices + the

spread between Iron ore and NZX Dairy futures

(in pink)

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AUDNZD


AUDNZD Vs Rates

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EURUSD

Weekly view: Has the rally to the 1.1714 high completed the 4th Wave corrective high we were looking for? If so the EURUSD is targeting a move towards 1.000 for W V in the months ahead.

Update: Unchanged - After trading towards the 1.1800 wave equality target, there is a temptation to call the 4th wave corrective bounce complete. However a study of the daily chart suggests we should see one more high above 1.1714, before we see the EURUSD resume the downtrend. Given the conflicting charts, I am currently neutral here. A break below 1.1100 would put the downside firmly back on the radar.

EURUSD Weekly


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EURUSD

EURUSD Daily


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USDCNH

Weekly view: USDCNH is in W III higher. Looking for levels to buy this pair.

Update: USDCNH is currently correcting the recent strong move higher and I would like to buy a dip back towards wave equality 6.3650/00 area. I will leave a firm order to buy a Tier 1 weighting at 1.3755 with a stop loss placed at 6.3450, targeting a move back towards 6.6000

USDCNH Weekly


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S&P Futures

Weekly view: S&P currently in a W IV pullback.

Update: In the last update we wrote “allow for a retest and break of the recent lows, though broadly speaking I view the current move as a 4th wave pullback to be followed by new highs into year end”.

2040/30 and then 2010/00 were the key levels on the way down and therefore will be key levels to watch as the S&P grinds higher. A close above 2040 is required as confirmation a low is in place. Until then allow for a retest and break of the last weeks 1831 low, keeping in mind this dip would be an excellent medium term buying opportunity.

S&P Monthly


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S&P Futures

S&P Futures Daily


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Trade Recommendations P&L


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Please feel free to call me to discuss the above ideas/trades, or if you are interested in tech views on other markets.

NB: This report is a product of the sales desk. Not a product of the CBA Economics and Currency Strategy Research group.

Commonwealth Bank Tony Sycamore Senior Dealer Institutional Foreign Exchange

Institutional Banking and Markets

Level 24, 201 Sussex Street P: (02) 9117 0341 F: (02) 9118 1012

M: 0403823048 E: [email protected]

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mailto:[email protected]

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Documents

Weekly Foreign Exchange Technical Report...2 AUDUSD Monthly View: The same count since May 2013. The rally from the 2001 low at .4776 to the 2011 high at 1.1081 completed a corrective