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    IronFX Intraday Comment | AUD/USD | 19/10/2015

    • The dollar traded unchanged or lower against most of its G10 counterparts during the European morning Monday, in the absence of any major market moving events. The greenback was lower against AUD, NZD, GBP and CHF, in that order, while it was virtually unchanged against SEK, JPY, EUR, CAD and NOK.

    • The Australian dollar was the biggest gainer in a relatively light European morning session, following the GDP data from China. Even though the data showed a slowdown in Q3, the fact that it was a touch above market expectations, pushed AUD/USD a bit higher. On Tuesday, we get the Reserve Bank of Australia (RBA) October policy meeting minutes. The minutes should provide a little more details on the Bank’s thinking. However, they are likely to echo a similar tone to the statement accompanying the rate decision and show a neutral bias regarding the future path of the interest rate. In such case, if in the minutes Bank officials hint no further rate cuts this year, AUD could firm up.

    AUD/USD traded higher during the European morning Monday after hitting support at 0.7235 (S1). However, the advance was halted fractionally above the 0.7300 (R1) resistance barrier. The pair has been trading within a possible triangle formation since the 12th of October and therefore, I would consider the short-term picture to be flat. A clear move above 0.7300 (R1) is likely to target the upper bound of the triangle or the next resistance at 0.7350 (R2). The RSI emerged above its 50 line, but turned somewhat down again, while the MACD, although below its trigger line, shows signs of bottoming near its zero lines. These mixed momentum signals corroborate my view to stay flat for now. As for the broader trend, the completion of a failure swing bottom on the 9th of October has turned the medium-term outlook somewhat positive. Nevertheless, given the recent pause, I would like to see a clear close above 0.7400 before getting confident again on the upside. Such a close would confirm a forthcoming higher high on the daily chart and could reinforce the medium-term uptrend.

    • Support: 0.7235 (S1), 0.7200 (S2), 0.7165 (S3)

    • Resistance: 0.7300 (R1), 0.7350 (R2), 0.7385 (R3)


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