TRADINC FX WEEKLY WATCHLIST

1/05/2017

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AUDNZD: The pair has respected the diamond pattern above. We are currently gauging entries on
lower time frames to get the best possible R:R on this trade. Price is sitting within quarterly range in
aussie demand and kiwi supply. Price has already broken a weekly descending TL which adds to the
confluence to buy this pair. With a 69% probability of a break to the upside this chart pattern is rare
but successful.

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USDJPY: This cup & handle setup is confluent with our DXY outlook for dollar strength due to
pullbacks in the interim. Entries will be based on the handle break which may come after some
further intraday downside movement. Scaling is possible on a neckline break. Targets are based on
the distance between neckline and cup bottom.

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NZDCAD: The pair is currently printing a descending triangle with price below the kumo after
bouncing off of a resistive trendline. We favour a break of said level 0.9200 to the downside. Looking
at the quarterly chart price has topped off at the 0.9600 level since the beginning of 2014. Q3 2016
saw the pair printing a strong inside bar projecting future dowside momentum. This is inline with our
next pair in the watchlist NZDUSD which we see has further room down as well.

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NZDUSD: The 0.6860 level meets the daily ascending trendline for kiwi with price coming to a halt
once again. We speculate a break of this area for a further downside move for this pair. Monthly and
quarterly charts showing bears in control. A break of 0.6800 will open the doors to 0.6300 followed
by 0.5500.

CADJPY: The Pair was travelling through a descending channel. Aftering breaking the curve and
retesting CAD was in heavy demand and we went on to break the channel too. We have now thrown
back to retest the resistive trendline turned support confluent with the 61.8% fib retracement level
and asending trendline. We are waiting on the correctly daily PA to take this pair upto the -61.8%
level at 97.00

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MACRO-BREAKDOWN

UK PMI’s could solidify sterling’s consolidation path

GBP had a good run of gains last week against in counterparts, particularly the USD. Market
participants remain very optimistic on the Brexit negotiations. There is a sense of much faith in PM
May to strengthen her position with the general election and go on to gain a good deal for Britain
with the EU. This week focus will be on the PMIs; Manufacturing, Construction and Services, these
numbers will be on Tuesday, Wednesday and Thursday all scheduled at 0930BST respectively.

Greenback in the spotlight with FOMC decision & labour market figures
Within inflationary levels still very much too low in the US, allied with a lack of moves higher in
wages, looking for the FOMC to hold back slightly. Players were initially anticipating the next move
to come in June, however this could be put back a notch, given current economic conditions. Should
this be the case, USD weakness will be observed.

Last month saw a much softer number than expect3e for non-farm payrolls, some had attributed
this largely to the fact that the labour market is reaching full capacity, which of course is good. The
unemployment rate itself is strong, lowest levels since 2007 prior to the financial crisis. A number
not to overlook is the average earnings, despite more people are in employment, wages are still low.
This is something the Fed would need to consider for future rate hikes. A USD positive scenario this
time round, would be for the unemployment rate hold steady if not drop again, allied with a pickup
in wages.

Le Pen has closed the gap in the polls

As we approach the second round for the French elections between Macro and Le Pen, polls have
proven how tight this could be. EUR this week could be set for some high volatility, on the back of
polls heading into Sunday. As it has been proven with Brexit and Trump, anything can happen on
voting day. Macron is most certainly not guaranteed to walk this election, as some of the major
newswires have suggested, cautious trading should be considered.

Inflation heads back toward RBA target band ahead of rate decision
The pickup in prices that has been shown for Australia in their latest data releases, would most
certainly be welcomed by the RBA. The cuts by the central bank in 2016, were largely attributed to
the drastic falling in inflationary levels. Still expecting the RBA to remain in a wait and see mode for
now, it may be too early in their view to start making moves in the near term. Looking for upbeat
rhetoric and some subtle hint, that they will be looking to start normalisation perhaps towards the
end of this year.

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