Sample Category Title

During Wednesday's trading session, the British Pound was stopped from the retracement by the support of the 62.20% Fibo at 1.2867 to end the trading day at 1.2884 mark. On Thursday morning, the rate was supported by the weekly S2 at 1.2880 to trade at the 1.2908 mark.

On Thursday, the British pound will trade sideways due to supports of the weekly S2 at 1.2880 and the 62.20% Fibo at 1.2867. It is expected that the currency exchange pair will be trading at the 1.2880 level. Meanwhile, the 55-hour SMA will try to catch up the rate to resist the rate during the day.

However, the rate could break the support levels of the S2 and the 62.20% Fibo if the US Dollar will appreciate against the British Pound after today's fundamentals.

During Wednesday's session, the currency pair passed the support of the weekly S1 at 1.1425 to end the trading day at 1.1398. On Thursday morning, the European Single Currency was trading near the weekly S1 at the 1.1469 mark.

In regards to the near-term future, most likely, the currency pair will bounce off the resistance of the weekly S1 at 1.1425 mark to trade downwards to stay at the 1.1380 level during the day.

On the other hand, the rate could break the resistance of the weekly S1 at 1.1425 due to today's EU fundamental data sets which could affect the currency exchange rate to trade towards the medium ascending pattern at 1.1455.

The US Dollar has increased its trading range against the Swiss Franc after the currency pair reversed from the lower boundary of a long-term ascending channel at 0.9550.

The exchange rate breached a swing high of 0.9992 during Wednesday's session. Currently, the pair is trading near a psychological resistance level of 1.00 during the morning hours of today's session.

Given that the currency exchange rate has breached the swing high of 0.9992, the next target for the price will be at the weekly R2 near the 1.0060 area during the following trading sessions.

However, the psychological resistance level as mentioned earlier could hinder the USD/CHF pair from reaching the said target

The common European currency has lost about 3.20% of its values against the New Zealand Dollar since the first week of October. This decline started after the currency pair made a U-turn south from the upper boundary of a long-term ascending channel at 1.7933 on October 8.

The exchange rate is trading near a resistance cluster formed by the weekly PP and the 50-hour simple moving average during the morning hours of Thursday's trading session.

If this resistance level holds, the currency exchange rate could aim at the bottom border of the long-term channel at 1.7350.

Furthermore, technical indicators flash a bearish signal on the daily time frame.

The US dollar has started to recover higher against the Japanese yen currency after sellers failed to break below critical trendline support during the European trading session. The USDJPY pairs directional bias is increasingly linked to US and Asian equity market. Buyers need to move price above the 112.87 resistance level, while sellers need to break well-defined trendline support.

The USDJPY pair is only bullish while trading above the 112.87 level, key resistance is now found at the 113.30 and 113.30 levels.

If the USDJPY pair trades below the 111.80 level, sellers will likely test the 111.60 and 111.10 support levels.

The euro remains under selling pressure against the US dollar after the German IFO survey for the month of October came in much weaker than expected. The EURUSD pair continues to trade below the neckline of a bearish head and shoulders pattern heading into the US session. Directional traders now await a clear break from the 1.1380 to 1.1431 price range, with the ECB interest rate decision and policy statement likely to be the main market mover for the single currency.

The EURUSD pair remains strongly bearish while trading below the 1.1431 level, key technical support is found at the 1.1380 and 1.1300 levels.

If the EURUSD pair holds moves above the 1.1431 level, key intraday resistance is found at the 1.1480 and 1.1500 levels.

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.14698
Open: 1.13914
% chg. over the last day: -0.63
Day's range: 1.13913 – 1.14199
52 wk range: 1.1299 – 1.2557

During yesterday's trading, the euro continued to lose ground against the US dollar. EUR/USD fell by more than 80 points and updated local minima. Weak statistics on economic activity in Germany and the Eurozone put pressure on the single currency. At the moment, the trading instrument is consolidating in the range of 1.13850-1.14200. Investors took a wait-and-see attitude before the ECB meeting. It is expected that the regulator will keep the main parameters of monetary policy at the same level. We recommend paying attention to the comments and rhetoric by the Central Bank representatives.

The news feed on 25.10.2018:

The ECB decision on interest rate at 14:45 (GMT+3:00);

Statistics on orders for durable goods in the United States at 15:30 (GMT+3:00);

The index of pending sales in the US real estate market at 17:00 (GMT+3:00).

The price has fixed below 50 MA and 200 MA, which indicates the power of the sellers.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell EUR/USD.

The Stochastic Oscillator is in the neutral zone, the% K line is below the% D line, indicating a drop in EUR/USD quotes.

Trading recommendations

Support levels: 1.13850, 1.13500, 1.13000
Resistance levels: 1.14200, 1.14500, 1.14850

If the price fixes below the local support level of 1.13850, a further fall in the EUR/USD quotes is expected. The movement is tending to 1.13300-1.13000.

Alternative option. If the price fixes above 1.14200, it is necessary to look for entry points to the market in order to open long positions. The movement is tending to 1.14500-1.14850.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.29821
Open: 1.28794
% chg. over the last day: -0.76
Day's range: 1.28732 – 1.29195
52 wk range: 1.2662 – 1.4378

Yesterday aggressive sales were observed on the GBP/USD currency pair. Drop in quotes exceeded 100 pips. The trading instrument has set new monthly lows. At the moment, the pound is in a sideways trend. Local levels of support and resistance are: 1.28750 and 1.29250, respectively. Positions must be opened from these marks. The GBP/USD quotes are tending to decline.

Publication of important economic reports from the UK is not planned.

The price has fixed below 50 MA and 200 MA, which indicates the power of sellers.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell GBP/USD.

Stochastic Oscillator is in the neutral zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 1.28750, 1.28400, 1.28000
Resistance levels: 1.29250, 1.29850, 1.30200

If the price fixes below the support level of 1.28750, a further fall in the GBP/USD currency pair is expected. The movement is tending to 1.28400-1.28000.

Alternative option. If the price fixes above 1.29250, it is necessary to consider buying GBP/USD. The movement is tending to 1.29600-1.29850.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.30839
Open: 1.30556
% chg. over the last day: -0.28
Day's range: 1.30154 – 1.30567
52 wk range: 1.2248 – 1.3387

Yesterday, the bearish sentiment prevailed on the USD/CAD currency pair. Trading instrument updated local lows. The Bank of Canada raised its key interest rate by 25 basis points to 1.75%. The demand for the Canadian dollar has increased significantly. At the moment, the USD/CAD quotes are consolidating in the range of 1.30200-1.30500. The USD/CAD currency pair is tending to decline. Positions must be opened from the key levels.

Today, the news feed on the Canadian economy is calm.

Indicators do not send accurate signals: the price is testing 200 MA.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell USD/CAD.

Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which indicates the bullish sentiment.

Trading recommendations

Support levels: 1.30200, 1.29850, 1.29600
Resistance levels: 1.30500, 1.30800, 1.31200

If the price fixes below the local support of 1.30200, a further fall in the USD/CAD quotes is expected. The movement is tending to 1.29700-1.29500.

Alternative option. If the price fixes above 1.30500, the growth of the USD/CAD currency pair is expected. The target level for profit taking is 1.30800-1.31000.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 112.406
Open: 112.214
% chg. over the last day: -0.39
Day's range: 111.819 – 112.363
52 wk range: 104.56 – 114.74

The technical pattern on the USD/JPY currency pair is still ambiguous. At the moment, the trading instrument is testing local support and resistance levels: 112.000 and 112.350, respectively. Financial market participants expect additional drivers. Positions must be opened from the key levels. We recommend paying attention to the dynamics of US government bonds.

The news feed on the Japanese economy is calm.

Indicators do not send accurate signals: 50 MA has crossed 200 MA.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell USD/JPY.

Stochastic Oscillator is located near the overbought zone, the %K line is above the %D line, which gives a weak signal to buy USD/JPY.

Trading recommendations

Support levels: 112.000, 111.650
Resistance levels: 112.350, 112.650, 112.900

If the price fixes above 112.350, the growth of the USD/JPY quotes is expected. The movement is tending to 112.650-112.900.

An alternative could be a decline in the USD/JPY currency pair to 111.650-111.500.

EUR/USD consolidates around 1.14 ahead of ECB meeting

The European Central Bank is expected to keep policy unchanged today. Nevertheless, in light of yesterday disappointing PMIs figure from the euro-area, one cannot exclude that Mario Draghi would shift to a more cautious tone regarding the growth outlook. The euro-area composite PMI contracted to 52.7 in October from 53.9 in the previous month and missed median forecast of 53.9. In addition, growth estimates have also been downwardly revised as economic growth is expected to have eased to 1.8%y/y in the third quarter, down from 2.1% in the June quarter.

Market participants are also expecting Mario Draghi to make some remarks about the ongoing situation in Italy. However, the ECB President always took great care to avoid commenting such subjects. Nevertheless, he would certainly recognize that it is creating short-term uncertainties, just as the ongoing trade war between the US and its main trading partners.

Overall, we believe that the risk is mostly skewed to the upside for the single currency. The euro already went through a substantial sell-off over the last few weeks. Just yesterday, the euro fell 0.65% against the greenback and fell to its lowest level since mid-August. We remain confident the Italian situation would be resolved shortly. After all, the Italian government made clear it was ready to discuss its budget with the EU commission.

Stronger Turkish lira ahead of CBRT meeting

Optimism for long Turkish lira (TRY) investors appears to be a sound strategy since the release of US pastor Andrew Brunson on 12 October. The lira remains below the 6 range against the greenback and has risen 4%. Today's Central Bank of Turkey (CBRT) meeting, however, could be a turning point for the trend that started in mid-October amid a weaker USD.

Although the current rally remains TRY supportive, the fundamentals have not changed. Inflation outreaches the 24% threshold (September y/y CPI 24.52%) and despite the recent rise of 625 bps from the prior MPC on 13 September. The current 1-Week Repo rate given at 24% implies a real interest rate near zero.

Therefore, as energy products account for approximately 70% of the rise in Turkish inflation and with it approaching the 25% mark by year-end, market participants will be expecting the CBRT to raise its key rate by 100 bps minimum. No reaction from the monetary institution side will tend to favour a decline in the Turkish lira.

Accordingly, currently trading along 5.7025, USD/TRY is expected to decline along 5.62 in the event of an interest rate hike. If the CBRT decides to do nothing, we can expect a rise of the pair along 5.78.

The pair extended weakness to 111.81 on Thursday, as yen benefited from recent risk aversion, but probe through key supports at 111.96 (rising 55SMA / trendline support) were so far short-lived, despite magnetic daily cloud twist (111.47).

Subsequent bounce signals that bears might be running out of steam, as momentum heads up and partially offsetting negative impact from bearish MA's / slow stochastic.

Today's close would provide more clues, as current long-tailed Doji or hammer could signal reversal.

Recovery needs sustained break above 10SMA (112.32) to sideline downside risk and generate bullish signal for further retracement of 112.88/111.81 bear-leg.

Conversely, stronger bearish signal could be expected on close below 55SMA / bull-trendline, which would expose key supports at 111.64/62 (daily cloud top / 15 Oct low) and risk further weakness on break.

Res: 112.32, 112.64, 112.74, 112.85
Sup: 112.08, 111.96, 111.81, 111.62

Bank of Canada delivered yet another hike of 25 basis points yesterday, as was widely expected and the Loonie strengthened about 90 pips against the USD, upon release and shortly after. The accompanying statement contained more hawkish elements as it dismissed worries about the recent slowdown of the CPI rate. It dropped the gradual approach to hikes, to show that no mechanical path exists and stated that rates will need to rise to a neutral stance. It also expects a boost in investment and export on USMCA and LNG deals, while at the same time accepts that a slowdown of the US GDP is possible in 2019. In the following press conference, BoC Governor Poloz stated that rate changes can be faster or slower. Currently the market seems to expect the next rate hike in January 2019 and that could provide a more bullish mood for the Loonie.

USD/CAD experienced high volatility yesterday, breaking the 1.3065 (R1) and the 1.3015 (S1) support lines, however corrected later on above the latter. We continue to have a bearish outlook for the pair, after the BoC’s interest rate decision. It should be noted though, that signs of stabilisation started to occur during the Asian session. Should the bears continue to dictate the pair’s direction, we could see it breaking the 1.3015 (S1) support line and aim for the 1.2965 (S2) support barrier. Should on the other hand the bulls take over, we could see the pair breaking the 1.3065 (R1) resistance line and aim for the 1.3115 (R2) resistance hurdle.

ECB Interest rate decision

The ECB is to release its own interest rate decision today (11:45, GMT) and is widely expected to remain on hold, currently EUR OIS imply a probability for the bank to remain on hold of 95.14%. Should that be the case, we could see the market’s attention turning to the accompanying statement and the following press conference. Comments about the unwinding of the QE program could exist and that the next rate hike could occur through summer 2019 repeated. The press conference (12:30, GMT) may prove the real market mover of the event, and some positive comments could be made for the CPI rates, while worries could exist about the GDP growth rate, especially after the preliminary release yesterday, of October’s PMIs. It should be noted that October’s preliminary PMI’s, dropped more than expected and set a bearish mood for the EUR by weakening it.

EUR/USD dropped yesterday, breaking the 1.1430 (R1) support line (now turned to resistance) and testing the 1.1385 (S1) support line. The pair’s direction today, may prove to be heavily dependent on ECB’s interest rate decision and the following press conference. Should the pair continue to be under the market’s selling interest, we could see it breaking the 1.1385 (S1) support line and aim for the 1.1345 (S2) support area. If the market favours the pair’s long positions, we could see the pair, breaking the 1.1430 (R1) resistance line and aim for the 1.1480 (R2) resistance level.

In today’s other economic highlights:

In the European session we get Germany’s Ifo Business Climate indicator for October and from Norway, Norges bank’s interest rate decision. Later on, we get from Turkey CBRT’s interest rate decision and in the American session, we get from the US, the durable goods orders growth rates as well as the pending home sales growth rate, both for September. As for speakers, Fed’s Richard Clarita speaks.

USD/CAD H4

Support: 1.3015 (S1), 1.2965 (S2), 1.2915 (S3)

Resistance: 1.3015 (R1), 1.3065 (R2), 1.3115 (R3)

EUR/USD 4H

Support: 1.1385 (S1), 1.1345 (S2), 1.1300 (S3)

Resistance: 1.1430 (R1), 1.1480 (R2), 1.1525 (R3)