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The US Dollar is trading in three channels simultaneously against the Polish Zloty. The senior pattern has confined the rate for the last seven months. If looking at the pair's movement two weeks ago, it is apparent that the senior channel took the upper hand over a more junior formation, as the rate halted near the 3.67 mark, thus failing to reach the upper boundary of the medium-term channel near 3.72. Currently, the rate is trading in a three-week channel down. Technical indicators signal that the Greenback might still edge slightly higher within the following two sessions, but reverse near the 200-hour SMA circa 3.62/63. The subsequent movement should be tended south in the short term down to the 3.57 mark where the weekly and monthly S1s and the lower boundary of the medium channel are located. This area could mark a minor correction upwards.

The EUR/USD exchange rate was little changed on the US housing market data release on Friday. On the report, the Euro fell 0.03% against the US Dollar, continuing the side move up to the 0.53% drop sparked by exacerbating political uncertainty in Germany, as Chancellor Angela Merkel failed to form a three-way coalition.

The Commerce Department said that the US homebuilding rose to the highest level of the year in October, where housing starts jumped 13.7% to a seasonally adjusted yearly rate of 1.29M units, while building permits added 5.9% to a 1.30M unit rate in October. Strong figures were expected to contribute to stronger economic expansion in the US over the course of the Q4.

The Canadian Dollar weakened against the Greenback on Friday, as the reports showed some cooling in the country's consumer inflation. The USD/CAD currency pair strengthened 35 base points or 0.27% to touch the intraday high in the 1.2820 area, but managed to save the gain only partially, entering the Monday session at the 1.2780 mark.

Statistics Canada reported that the country's Consumer Price Index declined to an annual 1.4% in September from a 1.6% increase registered in the previous month. The annual inflation growth weakened amid lower energy prices, widening distance from the 2% target and giving the Bank of Canada chance to wait until the next year for the better conditions allowing to make the next interest rate hike.

As the currency pair did not have any fundamental background that could justify a rapid move, it finished the week near the 55-hour SMA. However, in early hours of the new trading session it broke though combined support set up by the 38.2% Fibonacci retracement level and the weekly PP and approached the bottom boundary of a three-week long ascending channel. The reason for such sudden fall was based on news about Merkel’s failure to form a three-party coalition. Nevertheless, such weakening of the Euro is expected to have limited effect, as the above lower support line is additionally secured by the 200-hour SMA and the monthly PP located at the psychological 1.1700 level.

On Friday, after reaching the 1.3250 mark the cable made a sharp turnaround and slipped back to the 1.3180 level. From fundamental point of view, this movement matched with release of better than expected American housing data. But from technical perspective it signified a rebound from an intersection of upper boundaries of two large descending and ascending channels. In this way bears have outlined strong resistance area through which the pair is unlikely to climb without proper upside momentum. For this reason, the currency rate is expected to make another reversal even though the bottom trend-line of a junior ascending channel provides perfect support for gradual soar. The upcoming movement to the south is additionally supported by the aggregate market sentiment, which is 51% bearish.

Contrary to trade patterns theory, the currency rate did not make a breakout from the falling wedge formation to the north. Moreover, the safe haven Yen was quoted higher despite release of disappointing trade data. For this reason, the fall of the rate was most likely based on worries about vote for the new tax reform and Merkel’s failure to form a new government. On the one hand, the fact that the monthly S1 located at the 112.04 level sustained under such heavy pressure indicates on an upcoming recovery of the buck, which will tend to reach the 112.62 mark. This scenario is partially supported by the aggregate market sentiment, which is 59% bullish. On the other hand, the falling moving averages are likely to continue pushing the pair to the bottom in the nearest future.

Despite release of better than expected American housing data the bullish pressure prevailed. The surge was supported by a combination of the 55-, 100- and 200-hour SMAs in conjunction with the monthly PP. However, the fact that the pair managed to break through the upper boundary of medium-term ascending channel and practically reach the monthly R1 at 1,298.01 suggests that traders were also concerned about discussion and vote on the new tax reform plan. At the moment, it is too early speak about dissolution of the above pattern, as it is possible to simply adjust its boundaries. In that case, the exchange rate is expected to start moving in the opposite direction and trying to reach the weekly PP at 1,287.22, which soon will become additionally strengthened by the rising 55-hour SMA.

Cable extends advance for the fourth straight day on Monday and broke again into daily cloud (spanned between 1.3214 and 1.3261) after Friday's surge deep into cloud stalled and closed for the day below cloud base.

Daily studies remain supportive for eventual break through key supports at 1.3261/66 (cloud top/Fibo 38.2% of 1.3655/1.3026 descend) to generate strong bullish signal for test of key barriers at 1.3320/37 (01 Nov/13 Oct highs) which also mark tops of short-term range between 1.3026 and 1.3337.

The action is underpinned by ring hourly cloud and converged 10/20 SMA's attempting to form bullish cross at 1.3171.

Broken daily cloud base marks initial support at 1.3214 which should ideally keep the downside protected and guard 10/20 SMA's pivotal support.

Stronger bearish signal could be expected on return and close below 1.3122 (100SMA).

Res: 1.3266, 1.3305, 1.3320, 1.3337
Sup: 1.3214, 1.3186, 1.3171, 1.3122

The Euro stands in red at the beginning of the week, pressured by political uncertainty in Germany.

The pair was down to one-week low at 1.1722 in Asia (dip was contained by 30 SMA) after opening on Monday below 55SMA (1.1789) which repeatedly limited last week's upside attempts Fresh easing probed below pivotal supports at 1.1747/42 (100SMA/Fibo 38.2% of 1.1553/1.1859 upleg) but so far without clear break lower.

Bearishly aligned near-term studies and thickening daily cloud are continuing to weigh.

Close below Fibo support at 1.1742 will be initial bearish signal, with sustained break below 1.1706 (50% retracement of 1.1553/1.1859) needed to confirm.

On the other side, strong bullish signals were generated on double-bullish cross on daily chart (10/20SMA/Tenkan-sen/Kijun-sen) which may inflate the price and signal an end of corrective phase. Scenario needs close above 1.1800 for confirmation and fresh attack at daily cloud base (1.1812).

Res: 1.1796, 1.1812, 1.1859, 1.1877
Sup: 1.1742, 1.1722, 1.1706, 1.1670

The GBP/USD has been making a progressive trend move towards 1.3310. However, here is still resistance out there that needs to be taken away. The pair has formed W bullish pattern and the POC zone is wider today due to Friday's price action and confluence tools. 1.3195-1.3225 is the POC zone (W, Order block, ATR pivot, D L3, trend line, EMA89) and we might see another spike towards 1.3260 zone. However H1 momentum or 4h close above W H3/D H4 1.3272 is needed for a further push towards 1.3310 and 1.3327 eventually. A move below 1.3150 will put a pair in neutral territory again.

W H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

D H4 - Daily Camarilla Pivot (Very Strong Daily Resistance)

D L3 – Daily Camarilla Pivot (Daily Support)

D L4 – Daily H4 Camarilla (Very Strong Daily Support)

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