AUDUSD, Daily
The dollar has retained a soft tone, settling below 112s versus the yen, near the week’s low at 111.99 (which was seen on Tuesday), edging near nine-day lows versus sterling and logging a new 4-day low in the case against the Australian dollar, and drifting back some against the euro. EURUSD lifted to the 1.1850 area on a Bloomberg report that the ECB is considering halving asset purchases next year but with a longer than hitherto expected nine-month extension to the program. Attention today will be on U.S. CPI and Retail Sales data, as benign data would fit concerns among some Fed policymakers that low inflation is not a transitory phenomenon. The U.S. headline CPI to lift to 0.6% m/m from 0.4% m/m, driven by the rise in petroleum prices, but see core CPI remaining at a benign 0.2% m/m. Sterling and Brexit issues will remain at the fore. Talk of a no-deal exit from the EU has been increasing, with five rounds of negotiation (the fifth having concluded yesterday) having reached “deadlock,” according to the EU’s chief Brexit negotiator, Barniar. He also said that the EU would agree to a two-year transitory period, to buy more time after actual Brexit occurs in March 2019.
Today a Long Position was taken on AUDUSD, at 0.7830, once pair broke the recent upper fractal in the 4-hour chart and formed a performance above 23.6 Fibonacci level for 7-consecutive sessions. The pair is moving above 50-period MA, in the upper Bollinger Bands pattern, while MACD crossed to positive area early this morning. In the Daily timeframe, Parabolic SAR turned positive just yesterday, with RSIsloping away from oversold territory seen since September 27.
On this Daily position , target was set at the confluence of ATR (14), 20-Day MA and 38.2 Fibonacci level, at 0.7873, with support at 0.7775, based on ATR(14-Day)
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