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Aussie to Rally Higher

I'm betting on the AUD/USD heading higher during November and here's why. On the first chart below we see a slow but steady trend higher for the Aussie.
On the second chart we notice the constant pressure by the bulls on the resistance area. With each thrust the odds increase that eventually they will break the dam and push prices upward. I'm placing my bet at 1.7980. This is just below the 1.8000 round figure and yet within the bounds of the monthly ATR for this pair.
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Potentially Large Gains for Cable

We could potentially see large gains in Cable. The pair has been repressed in the past year by political instability. First by the Scottish independence referendum last year and now by the coming EU exit referendum. But as time goes on the 'Remain' camp continues to secure the lead. This could lead to some short squeezing as we get closer to the referendum date in June.
On the daily chart below we can see a completed reverse Head and Shoulders pattern. This signals that more gains could be on th…
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AUD/USD to keep pushing the upside

Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
The pair convincingly broke above the confluence of the 2015 support-resistance line, broken long-term trendline drawn off of 2001 and 2008 lows and…
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UPDATE 5: The impact of the U.S. jobs and wages report for April was rather small this time around. This could be to some extent due to lower participation in this holiday-heavy week but I think the main reason is that U.S. data doesn't seem to play the biggest role in the Fed's policy at the moment. Due to status of the U.S dollar as the number one reserve currency in the world, the Fed is in many ways a global central bank and must act accordingly. The bank is in no hurry with rate hikes and I think they'll stay sidelined at least until September.

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al_dcdemo 13 Maio

UPDATE 6: Last few days felt a bit like a summer in the markets. There was no real trend while volatility declined, particularly in European currencies - Euro's weekly range being currently worth only about 90 pips. Loonie (~250 pips) and Yen (~230 pips) have fared somewhat better. I think UK EU referendum is playing a hefty part here. The uncertainty is causing many players to postpone their decisions until after June 23rd. I wouldn't be surprised if the markets remain in the current mode for a couple of weeks before things really start to kick off in the run-up to the big event.

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al_dcdemo 19 Maio

UPDATE 7: Yesterday's FOMC Meeting Minutes were a big surprise. Rarely do this release, which basically contains data three weeks old, provide something new. June rate hike is now back on the table but I'm still of the view that we'll not see one at least until September. The reaction was U.S. dollar buying across the board. Loonie, also helped by falling oil, benefited the most and broke above strong resistance near 1.30. Cable on the other hand was the least affected after it rallied strongly on Remain option firmly ahead in polls.

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al_dcdemo 23 Maio

UPDATE 8: Apart from the yen, which gained about 90 pips on the day, G7 currencies didn't move much against the U.S. dollar today. Ranges were decent for a Monday however and we'll see if tomorrow adds to that. Some more of the ranging and choppy action in the days ahead wouldn't surprise me as the month draws to an end with one eye on the June which will host a multitude of important events, including RBA (7th), RBNZ (8th), FOMC (15th), BOJ (16th) central bank meetings and UK EU referendum (23rd).

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al_dcdemo 31 Maio

UPDATE 9: Aussie jumped about 60 pips overnight, after the release of much better than expected Building Approvals report. This kind of impact is rare for such an event but the market has been waiting for an excuse to start buying into the pair in what seems to be an oversold condition. The buying stalled just ahead of 200 DMA (0.7250) which remains an immediate resistance. Above that comes 2015 support/resistance line (0.7275) and then 100 DMA (0.7350). 0.7150 - 0.7200 may now hold as a support.

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AUD/USD to gain in the near-term

Monthly chart:
As most major pairs, Aussie accelerated its decline in the first month of this year. After a bit of consolidation it convincingly broke 0.80 level and 50.0% retracement of 2001 - 2011 uptrend. In the following three months it traded mostly in 0.7550 - 0.7925 range, but broke higher (to 0.8075) in the end of April. The breakout appears to be fake as the pair returned back to the range.
Weekly chart:
Should the downtrend resume, some demand may come in at 0.75 (level touted by RBA g…
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UPDATE 2: Week ahead will be big for the pair. We have Building Approvals m/m on Monday, Trade Balance and RBA meeting on Tuesday, Retail Sales m/m on Wednesday, Employment Change and Unemployment Rate on Thursday, RBA Monetary Policy Statement on Friday. Along with the data from US: ISM Non-Manufacturing PMI on Tuesday, ADP Non-Farm Employment Change on Wednesday and Non-Farm Employment Change on Friday. 20 and 50 day SMA should offer decent support, while 0.8050 - 0.8075 would be the first stronger resistance level.

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al_dcdemo 10 Maio

UPDATE 3: As widely expected, RBA finally cut Cash Rate to 2.00% from 2.25%. With the cut obviously had being fully priced in, the pair recovered from a knee-jerk lower in matter of minutes. The short squeeze continued until Wednesday afternoon, and the pair spent the rest of the week backing and filling. There was some action on Friday on the release of NFP, but the pair was essentially flat on that day. It closed the week just above previous (three-month) range resistance in 0.7910 - 0.7940 band.

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al_dcdemo 11 Maio

UPDATE 4: The data from Australia in the week ahead are not of particular note. NAB Business Confidence on Monday and Annual Budget Release on Tuesday may provide some volatility. while Chinese Industrial Production and US data, (Core) Retail Sales, PPI, Unemployment Claims and Prelim UoM Consumer Sentiment, will likely offer more. The pair is supported by 20 and 100 DMA with 50 DMA coming in a cent lower. Resistance is seen in 0.8050 - 0.8075 band.

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al_dcdemo 17 Maio

UPDATE 5: After lacklustre price action on Monday, Aussie broke higher on Tuesday and followed through strongly on Wednesday at which point it looked like the pair is about to become the star performer of the week. The pullback that ensued on Thursday and Friday prevented that, but the technical picture is still bullish with the first weekly close above 0.80 level since early January.

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al_dcdemo 18 Maio

UPDATE 6: There's not a lot on the calendar from Australia next week: Monetary Policy Meeting Minutes and few other lower-tier releases. HSBC Flash Manufacturing PMI from China may provide some volatility, but the main events will be FOMC Meeting Minutes and inflation report from the United States. If the uptrend is to continue, any deeper pullback should not extend below 0.7950. Initial resistance is now established just above 0.8150.

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Is Emerging Markets an Old Game in Town?

Forget about the NASDAQ trading suspension. The big story these days is emerging markets. During a slow summer week, attention turned away from the US and towards India, Indonesia, Turkey and Brazil. These once-sizzling markets are suffering large currency declines, which have prompted many of their central banks to announce intervention efforts to prop them up. Guess who’s to blame for the foreign fiasco? Yes, the US central bank chief Ben Bernanke is the goat once again. Emerging markets had b…
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