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Daily Insight: AUD Sells Off Sharply On Disappointing Data

Published 04/23/2014, 08:23 AM
Updated 07/09/2023, 06:31 AM

ASIA ROUNDUP:

ASIA ROUNDUP
  • AUD sold off sharply across the board following today's disappointing CPI figures, after spending most of the session climbing higher in anticipation of good numbers.
  • Chinese Flash PMI followed shortly after to provide an extra blow for the Aussie crosses and Hang Seng as it confirmed a 4th consecutive number below 50 to suggest industry contraction. Whilst it came in above expectations at 48.3 vs 48.0 it wasn't enough to stop the declines. 
  • NZD credit card spending y/y is up 8.1% to show consumer confidence is increasing
  • NZD Lamb exports fall but value has increased


UP NEXT: 

Economic Events

  • GBP Bank rate and asset purchase votes will be announced. Whilst voting members have been consistently unanimous to keep policy fixed a change in these numbers could cause a stir in the markets tonight and increase speculation of rate increases this year
  • Last month's French Flash PMI was at it's highest level, and the first time above 50 in nearly 3 years. A reading above 51.9 would be strong for Euro. 
  • German Manufacturing PMI follows shortly after and whilst is has seen 2 consecutive months below forecasts it has been in contraction (above 50) since July 2013. A reading above 53.90 would also be string for the Euro. 
  • US Equities Futures have opened and held on to recent gains, seemingly not too shaken by today's Chinese Data. 


Pairs to Monitor: EUR/GBP, GBP/USD, EUR/USD, USD/CHF

TECHNICAL ANALYSIS: 

USD/CHF: Confirmed bearish wedge; Initial target 0.8813

USD/CHF


Yesterday's analysis worked out well as it hit both our lower timerame short target and higher timeframe bullish target, respecting the key levels of S/R along the way.

We appear to have broken out of the bearish wedge and now trading beneath the daily pivot. Scalpers could consider bullish setups towards the daily pivot. 

  • A break above 0.8845 (Daily Pivot) opens up a run back to the 0.886 highs. 
  • Bearish setups below the daily pivot could be considered for a bearish leg down to 0.8825 and 0.8813


CAD/JPY: Bear flag below resistance

CAD/JPY


As this is on the daily chart this leaves more time to plan your entry.

The price action is oscillating wildly between a $5 range and currently mid-way between this range. Yesterday produced a Hanging Man Reversal below resistance level and now trading beneath yesterday's low.

​ The potential flag projects a target around the 90.0 lows; however the pattern would have to be reconsidered above 93.3 resistance. 

Flags are particularly messy patterns to trade, so an option is to trade on lower timeframes in direction of the bearish target, seeking trend on H4, H1, or H15 etc. 
 

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