Sample Category Title

According to the Office for National Statistics, the temps of growth of British economy spiked to 0.4% in the third quarter. This news gave the cable an upside momentum, which it used to break through the upper trend-line of a dominant descending channel.

As there are no significant UK or US data releases planned for today, bulls might use this lull to elevate the pair to the weekly R1 at 1.3306. In support of this assumption, there is need to take into account that some of the Pound traders are simultaneously following the ECB meeting and are trying to push the Sterling in parallel with the Euro. On the other hand, bears might use an area between the 1.3285 and 1.3290 marks to either halt or even turnaround the pair.

Although the currency exchange rate was fluctuating in an ascending triangle, releases of better than expected American data forced the pair to stop testing the weekly R1 at 114.19 and make a breakout in the southern direction. As the rate has already passed through the 55- and 100-hour SMAs, it is expected to continue the plunge. However, there are two support barriers on the way that might turnaround the pair one more time. The first one is located between the 113.25 and 113.21 marks, while the second one represents the rising 200-hour SMA. Daily chart suggests that the pair will not manage to slip below the 113.00 level, as that that area represent location of the lower support line of the dominant rising wedge pattern.

In result of the previous trading session, the exchange rate made a breakout from the falling wedge formation. The surge was not sharp, as the pair was slowed down by a combination of the 55- and 100-hour SMAs as well as the 61.8% Fibonacci retracement level. In first half of the day the pair is expected to test the 200-hour SMA near 1,284.77. The strength of this moving average most probably will force the pair to temporarily retreat. In larger perspective the yellow metal might notably recover against the buck, as the above breakout simultaneously signified a rebound from the bottom trend-line a one-month long ascending channel. In that case, there the pair is unlikely to reach the support line of a long term dominant ascending channel in the foreseeable future.

The Canadian Dollar fell strongly against the American counterpart on the Bank of Canada's interest rate decision on Wednesday. The USD/CAD gained 106 base points or 0.84% to the 1.2763 mark and continued gradual increase to the 1.2800 area.

The Bank of Canada announced that it kept its key interest rates unchanged at 1.00%, as expectedThe Bank was set to keep cautious stance as less stimulus will be needed over the time, as it considers future steps given the uncertainties and risks the economy faces. Moreover, the BoC emphasized that the 2% inflation growth is likely to be seen later in 2018 than previously anticipated, as the stronger currency could slow the export growth.

The US Durable Goods Orders report was one of the weakest currency trigger on Wednesday, causing a modest decrease in the EUR/USD exchange rate. The Euro fell against the Greenback 7 base point, but recovered initially to move closer to the weekly high above 1.820.

The Commerce Department showed that the US durable goods rose 2.2% for the month of September, owing to higher demand for transportation equipment. The report supported an upbeat sentiment in the manufacturing industry, as it managed to start recovering after being hit by hurricanes. In addition, the proposed corporate tax cut is likely be one more catalyst providing a stronger footing for growth in the fourth quarter, as well as in the beginning of 2018.

The Sterling strengthened against the US Dollar on the reports indicating the first signs of the UK economic recovery. GBP/USD rose 51 base points or 0.39% to the 1.3125 mark. The pair continued surging to the weekly high of 1.3257, where the Pound managed to sustain its gains.

The Office for National Statistics revealed that the UK GDP marked a quarterly growth of 0.4% in the Q3 of 2017, surpassing analysts' forecasts for a 0.3% expansion. The strong data suggested that the Bank of England's expected move to hike interest rates to 0.50% in November was still on the table, though Brexit uncertainty kept weighing on household and business confidence as well as investment delays, which could lead to the slower economic growth.

EUR/USD

Current level - 1.1830

The intraday bias is positive above 1.1790 support, for a test of 1.1880 area, with a risk of an extension to 1.1940 zone. The latter should cap the upside, for the next leg downwards, to 1.1660, en route to 1.1480.

USD/JPY

Current level - 113.40

The reversal at 114.20 signals a risk of another test at 113.05, but my outlook is counter-trend against the mentioned support, for a rise towards 115.50.

GBP/USD

Current level - 1.3268

The intraday bias is bullish above 1.3220, for a test of 1.3340 zone. The latter should provoke a reversal, for a slide towards 1.3020 lows.

USDJPY has been neutral during the past 7 months, with the market trading in a broad range between roughly 108 and 114 since mid-March. The recent rally off 108 to 114 has lost steam.

Technical indicators are in bullish territory (RSI above 50 and MACD above zero) and suggest the market should be well supported on dips. A decline in USDJPY could find support at the 200-day MA at 111.73 and then at the 50-day MA at 111.26. A move below these support levels would target the lower end of the range at 108. From here, the breakout from the range would open the way towards the next major low of 101.18.

Strong resistance is expected in the 114-114.50 area, which if breached, would put USDJPY on the path to retest major highs from December 2016 at 118.66.

The short-term bullish phase that saw prices advance from the lower to the upper end of the range during September 8 to October 25 has ended. The odds for further USDJPY strength in the near term are low as momentum has weakened. The broader trend is expected to remain neutral.

As the Asian session was about to complete, the euro was standing stronger ahead of the European Central Bank's policy meeting, while the dollar was distancing itself on the downside from the highs it reached earlier in the week.

The dollar index, which measures the strength of the US currency versus the currencies of six major US trading partners, was 0.1% lower at 0737 GMT, falling for a third straight day and moving further below Monday's three-week high of 94.02. At one point today the index hit 93.48, a six-day low. Dollar/yen was marginally lower, trading at 113.68. Yesterday the pair finished the day lower after earlier rising to a three-and-a-half-month high of 114.24. A slight fall in US yields also contributed to the dollar's fall.

Dollar bulls boosted the greenback earlier in the week as well in the week that preceded on the possibility of a more hawkish Fed chair as well as on hopes for tax reforms. It now seems to be the case that fresh catalysts are needed on these fronts (or in other areas) to push the dollar higher. Preliminary third quarter GDP figures for the world's largest economy will be released on Friday, while indications have been that President Trump will announce his Fed chair pick before his trip in Asia in early November.

Euro/dollar was 0.05% up on the day after rising 0.45% during yesterday's trading to close above the 1.18 handle. Today's decision by the ECB at 1145 GMT as well the press conference by President Mario Draghi at 1230 GMT are eagerly awaited by market participants. The central bank is expected to take a big step in the direction of policy normalization with the details of its new program having the capacity to significantly move euro pairs.

The British currency gave up part of yesterday's gains during today's trading. Pound/dollar was 0.2% down and euro/pound up by 0.2%, trading at 1.3240 and 0.8923 respectively. Yesterday sterling recorded hefty gains relative to both currencies after stronger-than-expected GDP numbers for the third quarter boosted expectations that the Bank of England will deliver an interest rate hike as it completes its meeting on monetary policy on November 2.

The loonie and the aussie continued trading near three-and-a-half-month lows relative to their US counterpart during today's trading and the kiwi near a five-and-a-half-month low relative to the greenback. The dovish-perceived stance by the Bank of Canada as it completed yesterday's meeting acted as a drag on the local dollar, while weaker-than-expected inflation numbers out of Australia yesterday put the aussie on a negative footing. The kiwi is weighted on uncertainty relating to the new government's policies. Data on New Zealand's trade balance released during today's session were worse than expected though forex market reaction as the numbers became public was fairly limited.

In commodities, gold was 0.1% higher, trading at $1,278.00 an ounce. WTI and Brent crude were both lower by 0.3%, trading at $52.01 and $58.26 per barrel respectively.

Weekly jobless claims and data on the goods trade balance due at 1230 GMT, as well as pending home sales at 1400 GMT will be gathering attention out of the US. Minneapolis Fed President and FOMC voting member Neel Kashkari will be giving welcome remarks at a conference hosted by the Minneapolis Fed at 1230 GMT.

USD/CHF - 0.9898

Most recent candlesticks pattern : N/A

Trend                                    : Up

Tenkan-Sen level                  : 0.9889

Kijun-Sen level                    : 0.9904

Ichimoku cloud top                 : 0.9894

Ichimoku cloud bottom              : 0.9875

Original strategy :

Buy at 0.9840, Target: 0.9940, Stop: 0.9805

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 0.9840, Target: 0.9940, Stop: 0.9805

Position : -

Target :  -

Stop : -

Dollar’s retreat after rising to 0.9940 has retained our view that consolidation below this level would be seen and pullback to 0.9860-65 (38.2% Fibonacci retracement of 0.9737-0.9940) cannot be ruled out , however, reckon support at 0.9838 would limit downside and bring another rise later, above said resistance at 0.9940 would extend recent rise from 0.9421 low to 0.9970, having said that, overbought condition should limit upside and price should falter well below psychological resistance at 1.0000, bring retreat later.

In view of this, we are looking to buy dollar again on further pullback as said support at 0.9838 should limit downside and bring another rise. A firm break below 0.9830 would defer and risk test of support at 0.9796 but only break of latter level would signal top is formed instead, risk retracement of recent rise to 0.9775-80, however, support at 0.973037 should remain intact.