Sample Category Title

The pair is probing again below key 200SMA support (111.78) following Friday’s spike to 111.68 low but failure to close below.

This marks very significant support and firm break here would trigger further downside and test of plethora of supports which lay below.

Rising 30 SMA (111.46) marks initial support, followed by more significant 100SMA / Fibo 38.2% of 107.31/113.43 rally at 111.10 and top of thick daily cloud at 110.90, break of which would confirm reversal.

Bearish near-term techs are supportive for further easing, but oversold slow stochastic on daily chart warns of further hesitation at 200SMA.

No clear direction could be seen while the latter holds.

At the upside, converging 10/20SMA’s (112.44/35 respectively) marks solid resistance which should keep the upside limited and bias with bears.

Res: 112.07, 112.35, 112.44, 112.56
Sup: 111.65, 111.46, 111.10, 110.90

Cable is consolidating on Monday after strong rally last week which was capped by descending 20SMA at 1.3337. Consolidation is so far holding within narrow range, but overbought slow stochastic warns of deeper pullback. Limited downside action could be expected while thickening hourly cloud (spanned between 1.3256 and 1.3222) holds dips. Extension below hourly cloud would risk further easing and test of 10SMA (1.3208) violation of which would generate stronger bearish signal. Conversely, sustained break above 20SMA (currently at 1.3326) and daily Kijun-sen (1.3341) will be bullish signal for fresh upside action towards pivotal barrier at 1.3415 (Fibo 61.8% of 1.3655/1.3026 descend).

Res: 1.3311, 1.3326, 1.3341, 1.3415
Sup: 1.3256, 1.3222, 1.3208, 1.3182

The Euro stands at the back foot at the beginning of the week and extends pullback after last week's double upside rejection at daily Kijun-sen.

Fresh weakness on Monday broke below 1.1800 pivot (Fibo 38.2% of 1.1669/1.1879 upleg) and pressures next supports at 1.1779/74 (10SMA / Tenkan-sen).

Bearishly aligned techs on daily chart favor further downside and break through 10SMA / Tenkan-sen would further boost near-term bears for extension towards daily cloud base (1.1702).

Broken 20SMA marks initial resistance at 1.1813, with south-turning Kijun-sen (1.1850) expected to cap upticks.

Today's calendar is thin with EU trade balance for August (23.3B f/c vs 23.2B prev) and speech from ECB's Lautenschlaeger being key releases from the Eurozone today.

Markets are awaiting news from Spain as Catalonian leader failed to clarify to Spanish PM Rajoy whether he had declared independence of Catalonia, with fresh political tensions expected to impact the single currency.

Res: 1.1813, 1.1850, 1.1879, 1.1917
Sup: 1.1774, 1.1749, 1.1702, 1.1669

EURUSD is neutral since the end of September after pulling back from 1.2091, the highest level since December 2014. The pair is consolidating below 1.1900 around the 50-day moving average. Near-term risk is tilted to the downside with immediate support at 1.1660.

EURUSD is expected to remain soft. The recent recovery from the 1.1660 area lost steam and the market is now looking capped by the 50-day MA. Further declines would target 1.1470 and 1.1290 ahead of the key 1.1100 level.

Rising back above resistance at the 50-day MA at 1.1842 would see prices move up to the 1.1900 level, which if broken, would increase the odds for another extension towards the 1.2091 peak. From here, there would be a resumption of the uptrend from April, with scope to rise to the 1.25 area.

In the bigger picture, the upward trajectory of EURUSD from the 1.08 area stalled at 1.2091 on September 8. Prices have moved out of the rising channel. Trend strength is weak as indicated by the horizontal 50-day MA, while momentum signals are neutral. However, there is no indication of a trend reversal yet unless the market falls below 1.1400.

Gold is tracking higher after bouncing from the 1260.5 low and prices have been rising steadily since October 6. There is room for a further extension higher after a bullish signal was given by the crossover of the 20 and 50-period moving averages on the 4-hour chart.

While risk is tilted to the upside, the market may enter a consolidation phase at current levels in the 1300 handle. This is because the RSI indicator has reached overbought levels and is near 70.

Immediate support is now at the key 1300 level. If it holds and there is a push to the upside, prices would target 1315. Building on these gains would help strengthen momentum for a move towards 1335 and then re-test the 1357.47 peak. Clearing this level would allow for a resumption of the broader uptrend.

A drop below the key 1300 support level would dampen the near-term bullish outlook and shift the focus back to the downside. Next targets are at 1280 and 1260.59.

The euro was on track to post a third consecutive red candle in Asia after Austrian national elections during the weekend heightened political risks in Europe, while markets are eagerly anticipating what the Catalan leader will say today before his deadline. On the other hand, the dollar managed to edge up against a basket of major currencies after the Fed chair shared her hawkish prospects for inflation.

European far-right parties seem to gain support in Europe again despite defeats in France and the Netherlands after a substantial performance in German elections a few weeks ago and in Austria on Sunday. Yesterday, Austrian national elections caused a headache in Europe with exit polls showing a victory for the Eurosceptic leader of the center-right People’s Party (OVP), Sebastian Kurtz (30.1%). The ruling center-left Social Democrats, who currently hold a coalition with Kurtz’s party, came second (27.1%) just ahead of the far-right Freedom Party (25.9%) which strongly increased its share of votes and consequently raised its chances to enter the government after 12 years of absence. Expectations are now for the OVP to form a coalition with the anti-immigration Freedom Party since the former moved further to the right following Europe’s refugee crisis in 2015. Final ballots will be given later this week.

In Spain, the Catalan leader, Charles Puigdemont, has a deadline set by the Spanish government until 0800GMT to clarify whether he has officially declared independence. If indeed he confirms the above, then he will be given another three days to step back from his position before the Spanish government takes control of the region. In the adverse scenario, Puigdemont will lose support from his far-left CUP coalition partner.

The euro, though, fell moderately to $1.1804, down by 0.18%, as markets anticipate the ECB to announce the reduction of its asset purchases program on October 26.

The Fed chair, Janet Yellen, speaking at an international banking seminar in Washington on Sunday, reiterated that the Fed should raise interest rates gradually despite weak inflation, explaining that the US labour market and generally the US economy remains resilient. Commenting on the inflation path, she argued that upcoming evidence on prices, which will be closely monitored, will not be as soft as they are currently, while she also admitted that the wage figures released along with the September job report were encouraging. This followed the release of the US CPI readings on Friday which missed expectations but continued growing.

Regarding the latest developments from the US-North Korea front, the US Secretary of State Rex Tillerson said on Sunday that the US President Donald Trump has given orders for diplomacy with North Korea to continue in a way so as to ease tensions between the nations, with Tillerson saying that “those diplomatic efforts will persist until the first bomb drops”. Meanwhile, US and North Korean navy forces will hold a joint exercise until Friday in Korean waters according to the South Korean defense official.

The dollar index climbed a shade to 93.20. Dollar/yen was mostly steady around 111.85, while safe-haven gold was also flat around $1,300 per ounce.

In other currencies, the aussie retreated by 0.14% to $0.7877 despite Chinese inflation rising above forecasts and iron ore prices surging for the second session. Particularly, consumer prices in China picked up by 0.5% m/m in September, recording the highest growth in eight months. Expectations were for the CPI to remain at August’s mark of 0.4%. The annual gauge stood in line with forecasts at 1.6%; below the 1.8% seen in the previous month. Producer prices increased surprisingly by 0.6 percentage points to 6.9% y/y.

The kiwi was up by 0.24% at $0.7181 with New Zealand’s Prime Minister, Bill English, saying that the next government could be determined by the end of the week.

In energy markets, oil prices drifted higher near three-week highs amid tensions in the oil-rich region of Kirkuk in Iraq. WTI crude rose by 0.76% to $51.84 per barrel and Brent jumped by 1.03% to $57.76.

The USD/CAD is showing the DCC (Dark Cloud Cover) variant pattern formation on 4h timeframe. The formation is noticed within the range of Weekly resistance pivots, and the price is trying to pullback within the POC zone where it might reject. The POC zone 1.2500-1.2520 (W H3/H4, trend line, DCC, Descending PPR) could reject the price towards 1.2432 and 1.2398. Have in mind that stronger bearish continuation is possible only when/if the price breaks below EMA89/trendline 1.2460. At this point price is retracing to the POC zone and we will see if the zone will reject it if the price gets into it. Ideally for bears 1.2595 should hold, else the price will probably make a new leg to the upside.

W L3 - Weekly Camarilla Pivot (Weekly Interim Support)

W H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

M H4 - Daily Camarilla Pivot (Very Strong Monthly Resistance)

M L3 – Daily Camarilla Pivot (Monthly Support)

M L4 – Daily H4 Camarilla (Very Strong Monthly Support)

PPR - Progressive Polynomial Channel

AP -Andrew's Pitchfork

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

EUR/USD

Current level - 1.1790

My outlook is bearish after the second failure at 1.1880, for a break through 1.1790, towards 1.1660 major support. 

USD/JPY

Current level - 111.78

The bias is still bearish, for a tight test of 111.50, with a risk of a dip to 111.00. The latter should provide a reliable base for another upswing towards 114.50 area. Trigger on the upside is 112.25 high.

GBP/USD

Current level - 1.3279

The recent rise has tested precisely 1.3340 hurdle, but the bias is still positive, so there is a risk of another attempt towards the mentioned resistance. An eventual break through that area will challenge 1.3460 zone. Crucial on the downside is 1.3220 and a violation of that zone will signal a slide towards 1.3000 area.

The euro has moved back towards the 1.1800 support level against the U.S dollar, after failing to find buying interest above the 1.1879 level. On Friday, the euro fell back from the 1.1875 level, after the release of weaker than expected inflation figures from the U.S economy.

Today's trading sentiment surrounding the EURUSD pair is neutral to slightly bearish. Traders will look to how strong buying and selling interest around the 1.1800 level, which should give further indication of the pairs next directional move.

The economic calendar remains fairly light in the European and U.S trading session, therefore traders will likely remain focused on the Catalonia crisis and key technical trading levels.

In the near-term the 1.1790 level remains a critical support level for the EURUSD, while a strong move back above the 1.1825 level should be taken as bullish.

Key intraday EURUSD support below the 1.1800 level is found at 1.1790 and then 1.1770. Further support below the 1.1770 level is found at the former weekly pivot point, at 1.1740 and the crucial 1.1710 level.

To the upside, key resistance is found at the euro's weekly pivot point, at 1.1807 and the 1.1825 level. Further intraday resistance is found at the 1.1845 level, and former swing high, at 1.1875

The British pound has started the new trading week just below the 1.3300 level against the U.S dollar, after hitting 1.3337 on Friday. Updates coming from Brexit negotiations between the EU and UK, continue to dictate the GBPUSD pairs intraday direction.

Today's trading sentiment surrounding the GBPUSD is neutral to slightly bullish, after the pair rebounded strongly last week, and closed the weekly candle well above the 1.3220 level.

The economic calendar remains fairly light today for sterling, however, we see the release of CPI inflation data from the United Kingdom, and a key speech from BOE Governor Mark Carney tomorrow.

Going forward, the GBPUSD pairs 100-week moving average remains the next upside barrier for buyers, located at 1.3333. Traders should also watch the daily price close and demand around the 1.3333 level extremely carefully.

Key intraday technical resistance for the GBPUSD pair is found at 1.3310 and the pairs monthly pivot point, at 1.3321. Further resistance is found at the pairs 100-week moving average, at 1.3333, and the key 1.3360 level.

To the downside, key intraday support for the GBPUSD pair is found at 1.3280, and the crucial 1.3267 level. Once below 1.3267, further support is found at the pairs weekly pivot point, at 1.3233 and the key 1.3220 level.