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AUDUSD Outlook: Extended Sideways Mode Between 0.7042 Base And Falling 10SMA
The Aussie dollar holds within congestion above multiple lows 0.7042, where temporary base has formed, with limited upside, capped by falling 10SMA, keeping the pair in the range.
Wednesday's steep fall reversed gains of previous two days and was contained at 0.7042, confirming the significance of the support.
Fresh recovery is under way today, but still away from pivotal barriers at 0.7105 (Tuesday's high) and 0.7130 (Wednesday's spike high), break of which is needed to ease downside risk and signal recovery extension towards next key barrier at 0.7145 (Fibo 38.2% of 0.7314/0.7042 fall).
Daily slow stochastic is moving higher after reversal from oversold territory and supports the notion along with north-turning momentum.
Extended sideways mode with vulnerable downside could be expected while the price action stays capped by 10SMA (0.7116).
US inflation data today could provide fresh direction signals. Eventual break below 0.7042 base would expose next strong bids at 0.70 and signal extension of bear-leg from 0.7314 (26 Sep high).
Conversely, sustained break above 10SMA and Fibo barrier at 0.7146 is needed to confirm base and open way for stronger correction of 0.7314/0.7042 descend.
Res: 0.7105, 0.7116, 0.7130, 0.7145
Sup: 0.7042, 0.7000, 0.6974, 0.6906
USDJPY Outlook: Bears Consolidate Above Strong Fibo Support At 111.97, Awaiting Fresh Signal From US CPI Data
Dollar's steep six-day fall found footstep at important Fibo support at 111.97 (61.8% of 110.38/114.54 rally).
The pair is consolidating above new three-week low on Thursday, after the greenback suffered the biggest one-day losses since 06 Sep on Wednesday, after being surprisingly pulled lower by strong fall in US stocks.
Overall structure remains negative and reinforced by bearish sentiment, looking for fresh bearish signal on close below 111.97 pivot.
Continuation of downtrend from 114.54 would expose supports at 111.36 (Fibo 76.4%) and 111.24 (rising 100SMA).
Rising bearish momentum supports, but deeply oversold slow stochastic warns of consolidative/corrective action.
US CPI data are expected to generate fresh direction signal.
Res: 112.40, 112.95, 113.40, 113.56
Sup: 111.97, 111.78, 111.36, 111.24
XAUSD Intraday Analysis
Gold prices have now surged above the local 1196.41 region that saw key support last week. For now, price remains in the middle range of the larger contracting triangle pattern which has framed price action over the last few weeks. If the topside triangle trend line is broken, focus will turn to a test of structural resistance around the 1206.61 – 1208.42 region. To the downside, initial support is sitting at the 1191.48 region, while below there the rising triangle trend line provides support.
GBPUSD Intraday Analysis
The run above the late September high of 1.3216 eventually failed and price has since moved back below the level. While below here, focus is on a run down to deeper support at the 1.3113 region where we have a raft of prior highs and low. Alternatively, if we see a move back above 1.3216, the September high of 1.3297 will come into focus.
EURUSD Intraday Analysis
After briefly piercing above the 1.1545 area resistance, EURUSD has since slipped back below the level. For now, price action continues to move within a short term bullish channel which until broken, keeps focus on a further recovery higher. If we do see a downside break, the 1.1515 level might provide some intraday support with prior highs and lows at the level. To the topside, the 1.585 – 1.1593 is the key resistance level (last week's high) which will need to be broken to see a further topside run.
Gold Prices Have Now Surged Above The Local 1196.41
The headline moves yesterday were seen in equity markets which plummeted (S&P down 3%) under pressure from an uptick in US yields and USD. Consequently, we saw a flight to safety which drove the bid in gold but weighed on risk currencies.
A light data calendar should see a fairly muted European morning though US CPI data due later today has the potential to further weigh on risk appetite if we see a strong number. Similarly, any US data weakness today should see some lightening up of yesterday's bearish tone.
USD/JPY Watch 111.55
Pivot (invalidation): 112.50
Our preference Short positions below 112.50 with targets at 111.85 & 111.55 in extension.
Alternative scenario Above 112.50 look for further upside with 112.85 & 113.30 as targets.
Comment As Long as 112.50 is resistance, look for choppy price action with a bearish bias.
GBP/USD Further Advance
Pivot (invalidation): 1.3175
Our preference Long positions above 1.3175 with targets at 1.3265 & 1.3300 in extension.
Alternative scenario Below 1.3175 look for further downside with 1.3130 & 1.3100 as targets.
Comment A support base at 1.3175 has formed and has allowed for a temporary stabilisation.
EUR/USD Further Advance
Pivot (invalidation): 1.1530
Our preference Long positions above 1.1530 with targets at 1.1580 & 1.1600 in extension.
Alternative scenario Below 1.1530 look for further downside with 1.1515 & 1.1485 as targets.
Comment The break above 1.1530 is a positive signal that has opened a path to 1.1580.
USD/TRY Technical Rebound In A Bearish Trend
Pivot (invalidation): 6.0980
Our preference Short positions below 6.0980 with targets at 6.0490 & 6.0200 in extension.
Alternative scenario Above 6.0980 look for further upside with 6.1330 & 6.1575 as targets.
Comment Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.
