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The Aussie dollar remains in steep descend for the fourth straight day and hit new low at 0.7054 (the lowest since Feb 2016. Thursday's close below key support at 0.7085 (11 Sep low) was strong bearish signal for continuation of larger downtrend from 0.8135 (2018 high, posted on 26 Jan), which needs confirmation on weekly close below 0.7085. The pair is on track for the second consecutive bearish weekly close and the biggest one-week fall since late Jan. Firm bearish setup of studies on all larger timeframes (day/week/month) adds to strong negative outlook. Bears eye psychological 0.7000 support as the sole obstacle en-route towards next strong supports at 0.6972 (09 Feb low) and 0.6910 (07 Sep 2015 low) which guard key longer-term support at 0.6825 (15 Jan 2016 low, the lowest since 2009). Bears show no signs of stall so far, as slow stochastic continues to head south, deeply in the oversold territory, but corrective action could be anticipated in the near term. Upticks are expected to offer better selling opportunities and should be capped by falling 10SMA (0.7182).

Res: 0.7085, 0.7111, 0.7128, 0.7141
Sup: 0.7054, 0.7030, 0.7000, 0.6972

The Euro stands at the back foot in early Friday's trading, after Thursday's recovery attempt was strongly rejected and capped by daily cloud base. Strong bearish stance which lasts for over one week, prevented the pair from stronger bounce, despite today's cloud twist which usually acts as a magnet. Bearish daily techs favor further downside and look for strong bearish signal on weekly close below cracked pivot at 1.1497 (Fibo 61.8% of 1.1300/1.1815 ascend). The pair is expected to stay in a quiet mode ahead of release of US jobs data, which are expected to be the key driver today.

Res: 1.1519, 1.1545, 1.1565, 1.1593
Sup: 1.1463, 1.1422, 1.1394, 1.1328

Pound accelerated higher in early European trading, following narrow consolidation in Asia and extends strong rally from the previous day when the pair gained 0.6%. Optimistic news about Brexit as EU negotiators said that divorce deal is very close inflated pound for bounce from dangerous zone. Double-bottom was left near strong supports at 1.2900 zone, generating positive signals along with Thursday's bullish outside day and close above thick daily cloud. Renewed strength cracked initial barrier at 1.3059 (falling 10SMA) and pressures nearby pivots at 1.3066 (Fibo 38.2% of 1.3297/1.2922) and 1.3082 (20SMA), break of which is needed for next bullish signal. Improved sentiment does not have full support from technical studies which are in mixed setup on daily chart (momentum continues to trend lower / slow stochastic heads north after reversal from oversold territory, while MA's are in mixed mode) and do not provide clear signal for now. Today's close above 20SMA would sideline downside risk, with extension and close above 1.3155 (Fibo 61.8% of 1.3297/1.2922) needed to confirm reversal. Bearish scenario requires return and close below 55SMA (1.2985) to shift near-term focus lower again and expose key supports at 1.2922/00 zone (double bottom of 03/04 Oct, daily cloud base / Fibo 61.8% of 1.2661/1.3297 ascend). US jobs report is in focus and could be the key driver today. US labor sector is expected to further expand in September, with forecast for 185K new jobs added in Sep, unemployment expected to fall to 18-year low at 3.8%, but earnings are expected tick lower (0.3% f/c in Sep vs 0.4% previous month). However, overall picture of labor sector remains positive and sufficient to keep inflation around 2% target, which is expected to keep Fed on track for further rate hikes. Overall better than expected figures today would boost dollar and turn pound's near-term outlook negative, negative, while downbeat numbers from US jobs sector would spark stronger recovery.

Res: 1.3059, 1.3066, 1.3082, 1.3110
Sup: 1.3012, 1.3000, 1.2980, 1.2922

The USD/JPY currency pair has formed a zig-zag close to the PP point support after spiking from an emerging inverted head and shoulders pattern. The market is waiting for the NFP data along with the Average Hourly Earnings and Unemployment rate. NFP is very important for the USD, as job creation is a leading indicator of consumer spending, which accounts for a majority of overall economic activity. Don't forget to follow our Forex calendar for all regular updates on the news, economic announcements, forecasts and much more.

Technically, the USD/JPY currency pair formed a zig-zag pattern that is bullish in its shape, and the rejections from the 113.60-90 POC zone might push the pair towards 114.50, and eventually 114.95 and 115.40. A close below 113.50 will probably fuel the bears with enough momentum to push towards 112.60. During the NFP release, significant volatility should be expected. Always pay attention to price action before you start making new entries. Consolidation usually precedes breakouts.

Pivot Lines - Weekly Support and Resistance

POC - POC - Point Of Confluence (The zone where we expect the price to react - aka the entry zone)

The GBP/USD currency pair made a bullish bounce and is now retesting the resistance trend line (red), which is a decision zone for a bullish breakout or a bearish bounce. The price reaction will depend on which candlestick patterns develop at the resistance line. A bullish break could see the price move higher to the test the Fibonacci levels, whereas a break below the support trend line (blue) could indicate a larger bearish breakout.

The GBP/USD currency pair is probably building an ABC (blue) retracement back to the Fibonacci retracement levels of wave 2 vs 1. This wave 2 (purple) is invalidated when the price breaks above the 100% Fibonacci level.

The GBP/USD currency pair is indicating the potential start of wave 5 (pink) and end of wave 4 (pink) if price manages to break below the support trend line (blue).

The EUR/USD remains in a downtrend and the current bullish price action could be a pullback as long as price stays below the resistance trend lines.

If the EUR/USD continues with the downtrend, then the next target could be the 78.6% Fibonacci retracement level near 1.14. A break above the resistance trend lines however could indicate a change of wave patterns as a wave B (purple) might still see a larger bullish expansion.

The EUR/USD could be completing a bullish ABC (green) pattern within wave 4 (blue) as long as price stays below the 50%Fibonacciretracement level of wave 4 vs 3. A break above this Fib invalidates the wave 4 pattern whereas a break below the support trend line (blue) could indicate a bearish breakout.

Pivot (invalidation): 113.75

Our preference Long positions above 113.75 with targets at 114.05 & 114.25 in extension.

Alternative scenario Below 113.75 look for further downside with 113.50 & 113.30 as targets.

Comment The RSI lacks downward momentum.

Pivot (invalidation): 1.2995

Our preference Long positions above 1.2995 with targets at 1.3040 & 1.3060 in extension.

Alternative scenario Below 1.2995 look for further downside with 1.2970 & 1.2950 as targets.

Comment Even though a continuation of the consolidation cannot be ruled out, its extent should be limited. The pair has broken above the upper boundary of a bearish channel drawn from September 27.

Pivot (invalidation): 1.1490

Our preference Long positions above 1.1490 with targets at 1.1520 & 1.1545 in extension.

Alternative scenario Below 1.1490 look for further downside with 1.1460 & 1.1430 as targets.

Comment A support base at 1.1490 has formed and has allowed for a temporary stabilisation.

Pivot (invalidation): 6.1210

Our preference Long positions above 6.1210 with targets at 6.2155 & 6.2630 in extension.

Alternative scenario Below 6.1210 look for further downside with 6.0590 & 6.0270 as targets.

Comment A support base at 6.1210 has formed and has allowed for a temporary stabilisation.