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In line with expectations, the currency exchange rate failed to slip below combined support formed by the 38.2% Fibonacci retracement level and the weekly R2 as well as to climb above combined resistance set up by the 50% retracement level and the monthly R1. It seems that the pair will continue moving undecidedly due to additional pressure exercised by the rising 55-hour SMA from one side and the weekly R3 from the opposite side. There is a good chance that the exchange rate will make a decisive breakout during one of today's fundamental events, such as the US housing data release. In the meantime, there is a need to remember that traders' outlook for the Euro remains predominantly bearish so as the aggregate market sentiment, which is 67% bearish.

AUD/USD – 0.7545

Original strategy:

Sold at 0.7720, met target at 0.7550

Position: - Short at 0.7720
Target:  - 0.7550
Stop:-

New strategy :

Stand aside

Position: -
Target:  -
Stop:-

As aussie has dropped again today in line with our bearish expectation, adding credence to our bearish view that recent decline from 0.8125 top is still in progress, our downside target at 0.7550 was just met (with 170 points profit), although near term downside bias remains for this move to extend weakness to 0.7500, loss of downward momentum should prevent sharp fall below 0.7440-50, risk from there is seen for a rebound later. 

As we have taken profit on our short position entered at 0.7720, would not chase this fall here and would be prudent to stand aside for now. Above 0.7605-10 would bring rebound to 0.7650, however, reckon upside would be limited to 0.7701 resistance and price should falter well below this month’s high at 0.7730, bring another decline.

On the 4-hour chart, recent upmove from 0.7329 is unfolding as an impulsive rise with wave 3 as well as smaller degree wave (iii) extending, only minor wave v of (iii) has ended at 0.8125, hence bullishness remains for this move to extend headway to 0.8200, then towards 0.8300, however, reckon upside would be limited to 0.8400 and the final wave 5 should falter below 0.8500, bring correction later.

A release of better than expected information on the British retail sales supported active appreciation of the Pound and provided an impulse strong enough to break through the 1.3228 resistance level and reach an intersection of upper boundaries of a dominant descending and junior ascending channels. As there are no significant macroeconomic data releases planned for today that could facilitate the further surge, the cable is expected to make a rebound and start the new trading week moving back to the 1.3200 mark. The only question remains strength of which pattern will prevail. Majority of traders have bullish outlook on the Sterling. However, the aggregate market sentiment is 53% bearish. In this sense, there is a need to remember that currency pair is trading in a general uptrend.

As it was expected, the currency exchange rate made a rebound from combined resistance formed by the monthly PP and the falling 55- and 100-hour SMAs. However, fears over impact of the new US tax reform that was passed by the House last night led to sharp apperception of all safe have assets, including the Yen. On the one hand, lower support line of the currently active descending channel sustained the bearish pressure. On the other hand, inability of the rate to break to the top three days in a raw points out on transformation of this pattern into the falling wedge formation. In any case, a sudden breakout to the north is not expected due to development of another resistance barrier consisting from the falling 55-hour SMA and the weekly S1.

Until beginning of new trading session, a combination of the 55-, 100- and 200-hour SMAs in conjunction with the monthly PP managed to constrain the pair from breaking to the top. However, once the news that the US House of Representatives passed its own version of the tax reform, the gold prices inched to the top. On the one hand, this advance confirmed existence of a minor ascending channel, which, in turn, implies further appreciation of the gold. On the other hand, further road to the north is obstructed by the 1,283.90 and 1,286.13 resistance levels. In short term, the pair is likely to make a rebound. But, generally, the rate is expected to continue heading towards the upper boundary of a medium-term ascending channel, which is supported by the 61% aggregate bullish market sentiment.

The Sterling appreciated against the US Dollar on the weak retail sales figures for the UK on Thursday. Following the release, the GBP/USD exchange rate increased 17 base points or 0.13% to hold very close to the 1.3200 level and then jump above 1.3230 on Friday morning.

Britain's retail sales marked their first yearly decrease since 2013 in October as shoppers struggled with rapidly-rising prices and sluggish pay growth. The ONS showed that retail sales fell 0.3% year-on-year along with a 0.3% monthly gain over the course of October. The downward trend is expected to be revised during the next year amid weaker inflationary pressures as well as firmer increase in wages, as underlying growth rate was improving.

The pair accelerated further down on Friday after n/t bears from 114.73 peak took a breather on Thursday for consolidation.

Fresh weakness found footstep just ahead of initial target at 112.31 (top of thick weekly cloud), violation of which would open way for extension towards converged 100/200SMA’s (111.73) and top of rising daily cloud (111.46).

Scenario is supported by weaker dollar on concerns about US tax plan which triggered safe-haven buying.

Weakening daily techs are adding on rising bearish pressure.

Sideway-moving daily Kijun-sen is expected to cap upticks.

Res: 112.90, 113.19, 113.36, 113.87
Sup: 112.31, 111.90, 111.73, 111.46

Cable holds firm tone on Friday and establishes above 1.3200 handle, extending advance from the previous day on better than expected UK retail sales data.

Fresh bulls eventually penetrated daily cloud (spanned between 1.3214 and 1.3277) and pressure pivotal barriers at 1.3266/77 (Fibo 38.2% of 1.3655/1.3026/cloud top).

Sustained break here would generate bullish signal for push towards key barriers at 1.3320/37 (tops of short-term range, break of which is needed to confirm double-bottom (1.3026/38) and spark further retracement of 1.3655/1.3026 descend.

Broken cloud base marks initial support at 1.3214 which should ideally keep the downside protected. Extension below 1.3188 (daily Kijun-sen/session low) would soften near-term tone.

Res: 1.3266, 1.3277, 1.3298, 1.3320
Sup: 1.3214, 1.3188, 1.3158, 1.3130

Near-term bias remains negative following two-day fall after strong upside rejection deeply in the daily cloud and Friday’s recovery attempt stalling under cloud base.

Daily slow stochastic reversed from overbought territory and heads south, showing room for further downside.

The price may hold in extended consolidation between cloud base (1.1827) and key support at 1.1742 (Fibo 38.2% of 1.1553/1.1859 upleg reinforced by rising 100SMA), as daily MA’s remain in bullish setup and underpin.

Only firm break below 1.1742 would sideline near-term bulls for stronger correction of 1.1553/1.1859 upleg).

Bullish scenario needs sustained break above daily cloud (1.1827/1.1877) to resume steep recovery from 1.1553 (07 Nov low).

Res: 1.1827, 1.1859, 1.1877, 1.1886
Sup: 1.1756, 1.1742, 1.1723, 1.1706

The euro has regained the 1.1800 handle against the U.S dollar, hitting 1.1822 during the Asian trading session, as U.S political uncertainties resurface. New reports of possible collusion between the Trump administration, and Russian officials during the U.S election campaign are hurting U.S dollar sentiment on Friday. The EURUSD pair currently trades above the 1.1800 level, ahead of a key-note speech by ECB President Mario Draghi at the European Banking Congress, in Frankfurt, Germany.

The EURUSD pair remains intraday bullish while trading above the 1.1800 level. Further upside towards the 1.1860 and 1.1910 levels seems likely.

Should price-action decline below the 1.1800 level, sellers will likely test towards the 1.1767 and 1.1710 technical levels.