Final Report

Currency pair AUD/CAD

Subject:

Trading and Exchange

Section:

Submitted by:
Muhammad Asim
Saad Rafique Ali

L1S13MBAM0027
L1S13MBAM0047

Submitted to:
NIZAM FEROZE

Dated: May 23, 2016

Graph of13th MAY 2016

On 13 may 2016 the candle become DOJI its means the trend is near to end and for a long time seller
has power in hands but at closing time the buyers increases in the market due to this price goes
upward, overall DOJI shows neutral trend

Fundamental Analysis
May 13 The Australian government raised a record-matching A$7 billion ($5.14 billion) in a new issue
of 12-year debt, with one third sold to international investors attracted by the bond's relatively high
yield, which impact economy strongly.

Technical analysis
Record-matching A$7 billion ($5.14 billion) in a new issue of 12-year debt this impact define as
when Govt. issue the Bond the money goes to the Government due to this, money circulation
decreases the AUD will be appreciated. That why the trend is going to end.

Source
http://www.reuters.com/article/australia-debt-aofm-idUSL3N1892CI

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Graph of 16th MAY 2016

On 16 may 2016 candle stick become inverted hammer its mean there is buying pressure whole
day but at closing time sellers increases in the market but overall price is bullish. This candle
confirming the bullish signal.

Fundamental Analysis
May 16 Australian shares rose 0.6 percent on Monday, helped by solid gains in healthcare stocks.
Which affects the economy positively and the value of Australian dollar appreciate which appreciate
the value of pair

Technical analysis
May 16 Australian shares rose 0.6 percent on Monday, helped by solid gains in healthcare stocks
The S&P/ASX 200 index ended up 29.91 points at 5,358.90.

Source
http://www.reuters.com/article/australia-stocks-close-idUSL3N18D2KX

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Graph of 17th MAY 2016

On 17 may 2016 the candle stick is bullish its uppers shadow is higher than lower shadow.

Fundamental analysis
On 17 may 2016 the news is declared by the reserve bank of Australia that inflation rate is
declined than previous inflation rate which means economy is becomes stronger which result the
currency of Australian dollar is appreciated. On the same date news by the statistics Canada
manufacturers sales declined, its a leading indicator of an economic health due to decreasing
sales its affects badly which leads currency depreciation
It means Australian dollar are appreciating due to less inflation rate and Canadian dollar is
depreciated due to decreasing sales. Canadian dollars is denominator and Australian dollar is
nominator which results price of pair is improved

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Technical analysis
Inflation had declined to a little less than per cent, compared with about per cent in the
December quarter, to be about 1 per cent over the year. Manufacturing sales decreased 0.9% to
$50.0 billion in March.

Source
http://www.forexfactory.com/news.php?do=news&id=591249
http://www.forexfactory.com/news.php?do=news&id=591190

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Graph of 18th MAY 2016

On 18 may 2016 the candle stick is bearish its lower shadow is higher than upper shadow

Fundamental Analysis
Foreign investments of Canadian securities are increasing which result the strengthen of
economy which appreciates Canadian dollars, Canadian dollars appreciates which means pair is
depreciate because Canadian dollar is denominator.

Technical Analysis
Foreign investment in Canadian securities strengthened for a third straight month to reach
$17.2 billion in March

Source:
http://www.forexfactory.com/news.php?do=news&id=591401

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Graph of 19th MAY 2016

On 19 may 2016 the candle stick is bullish and real body of candle is small than last real body of
bullish candle

Fundamental Analysis
Unemployment rate decreases which means inflation rate decreases which leads to decrease
money supply which results increase the value of money which results appreciate of Australian
dollar
Wholesale sales declined for a second consecutive month which impact badly on economy which
results depreciate of Canadian dollar
Due to decrease in unemployment rate Australian dollar appreciated which in nominator and due
to decrease in wholesale sales Canadian dollar depreciates which is denominator which means
pair is improved

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Technical analysis:
Employment increased 4,100 to 11,910,800. Unemployment decreased 1,900 to 726,600.
Unemployment rate decreased by less than 0.1 pts to 5.7%. Participation rate decreased by 0.1
pts to 64.9%.

Source:
http://www.forexfactory.com/news.php?do=news&id=591532
http://www.forexfactory.com/news.php?do=news&id=591643

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Graph of 20th MAY 2016

On 20 may 2016 the candle stick is bullish and the real body of candle is small than last real
body of bullish candle

Fundamental Analysis
Consumer price index increases which means purchasing power decreases. That indicates
increase in inflation, which increases money supply which result Canadian dollar depreciates

Technical analysis
The Consumer Price Index rose 1.7% in the 12 months to April, after increasing 1.3% in March.
Excluding gasoline, the CPI rose 2.0% year over year in April, following a 1.9% increase in
March

Source:
http://www.forexfactory.com/news.php?do=news&id=591805

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Next Week Forecasting Tools

Graph of MACD
Standards are;

Red line means signal line 9 days

Black line means MACD line 26-12=14 days

This graph shows MACD line rises above the signal line which indicates bullish signal

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Graph of ROC

We selected the ROC standard define as

Overbought zone
Oversold zone
Zero line ( Signal )

+10
-10

When momentum crosses above zero it gives buy signal, when momentum crosses below the
zero line it gives sell signal.
ROC not confirming clear signal of buy and sell

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Graph of RSI
We selected the RSI Period is 14 days standard define as

If crosses 70% it means overbought zone

If crosses 30% it means oversold zone

This RSI Graph shows buy signal because RSI rises out of oversold zone

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Graph of Pivot Point

Graph show the Price limits for the next week. Sky blue line show the Pivot Point and Red lines
Show the supports S1 and S1. And Green line show the Resistance level R1 and R2.

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Calculation of Pivot Point , Resistance level and Support.

Fibonacci

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By using Fibonacci tool we calculate the retracement level. The graph show the how much price
will be goes down for different standard of Fibonacci retracement.

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Forecasting Analysis:
We observe overall graph and candles the first day 13 may represent the end of trend as previous
it is bearish when doji become the trend becomes end and it is bullish at 16 may the price goes
upward after high fluctuation. Then on 17 may price consistently goes upward with a high real
body bullish candle. On 18 may the price goes down temporary doing retracement and on 19 it
goes upward because trend is bullish the end day of 20 may is also make bullish candle.
Then we apply oscillators ROC, RSI, MACD. ROC not giving confirming signal while MACD
and RSI give bullish signal May 23 Australian share fell to their lowest in nearly two weeks on
Monday as weaknesses in iron ore prices weighed on the major miners, while a soggy
performance by the big banks ensured a negative start to the week. It may be retracement overall
trend of next week will be highly like bullish.
Why we say the price will be go up in next week because of applying the difference tools and
also define here what will be support S1 and S2 as well as Resistance R1 and R2 by using the
Pivot point tool. As we use Fibonacci tool we calculate the retracement level, how much price
will be goes down for different standard of Fibonacci retracement.

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Conclusion

We observe 1 week candles in which we analyze that trend is going upward after become DOJI
on 13 may2016 then we do fundamental analysis and apply different oscillators MACD, ROC,
RSI which forecast that next week trend will be highly like to be bullish. Also define the price
limits Support and Resistance level and retracement level.

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