Market Analysis: 13 September, 2016
By Christala Parmaxi.
Chinese Economic Releases
Chinese YoY data for August has been announced today during the Asian morning session, with the figures exceeding expectations. The Fixed Asset Investment change measuring the total spending on non-rural capital investments was released 8.1% against expectations of 8% and in line with last month’s YoY 8.1% change. However, the level of this change is a record low in 16 years, being the lowest change since December 1999. The industrial production was released at 6.3% against July’s figure of 6% while Retail Sales change for August was 10.6% against expectations of 10.3%. However, the Chinese Yuan did not react to those positive releases and is trading within a triangle on the hourly chart.
FOMC Policy Meeting
Monday was the last day when FOMC members were allowed to publicly share their views on monetary policy as September policy meeting approaches on September 21st. Fed’s Governor Lael Brainard and permanent Fed’s voter stated yesterday that the Fed should avoid removing US economy’s supports too quickly. The Governor called for more evidence supporting rising inflation and consumer spending before raising rates. Also, the President of the Bank of Atlanta Dennis Lockhart referred that the issue of raising rates and economic conditions would take a “serious discussion” during the next policy meeting. The US Dollar lost strength against most of its majors after the comments of Fed members.
The Aussie triggered our suggested entry point yesterday and is moving in our favor today, with the day closing above the uptrend line. We still keep our bearish view and we are expecting the price to reach the 0.745 support level.
The pair moved exactly as we described, and is ranging below Tenkan-Sen at the time of writing and below Ichimoku’s cloud. The overall picture is bearish, but as long as the support of 101.5 holds, we prefer to apply the wait and see strategy. RSI is below its equilibrium level but it is moving to the upside while MACD is slopping downwards on negative territories and below its trigger line.
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