From a technical perspective, the EUR/USD exchange rate seems poised to extend its retreat from the monthly high (1.1831) after failing to hold above the trend-defining 50-day moving average (1.1727). The RSI’s dive back below its neutral midpoint, in tandem with the MACD indicator tracking firmly in negative territory, hints at swelling bearish momentum and may ultimately inspire a more extensive downside push, if psychological support at the 1-17 mark. With that in mind, a daily close back below the August low (1.1696) would probably signal a continuation of the downtrend extending from the yearly high (1.2011) and carve a path to test the March high (1.1495), if sellers can overcome support at the 38.2% Fibonacci (1.1626). Conversely, a break and close above the 21-DMA (1.1752) could inspire a rebound back towards the October 9 swing-high (1.1831), with a daily close above the 1.1850 mark needed to bring the yearly high (1.2011) into focus.
Brexit talks made no progress as European Union negotiators called on the U.K. side to negotiate further. European leaders consider U.K. Prime Minister Boris Johnson threat to abandon Brexit talks today is a bluff. From a technical point of view, on a daily chart, GBP/USD stands below its horizontal resistance at 1.3080 and stands below its 50-day moving average . Readers may therefore consider the potential for further weakness below horizontal resistance at 1.3080. The nearest support would be set at September bottom at 1.2675 and a second one would be set at horizontal support at 1.2500 in extension.
After a couple of failed attempts near 106.00, the US Dollar reacted to the downside against the Japanese Yen. USD/JPY broke the 105.80 and 105.60 support levels to move into a short-term bearish zone. There was a break below the 38.2% Fib retracement level of the main upward move from the 104.00 low to 106.10 high. However, the pair tested the main 105.00 support. The 50% Fib retracement level of the main upward move from the 104.00 low to 106.10 high is also near 105.00. Therefore, a clear break below the 105.00 support could spark a sharp decline. The next major support is near the 104.50 level. Conversely, the pair could start a fresh increase from the 105.00 support. To move into a positive zone, the pair must clear 105.50 and the 100 SMA. The main resistance is still near 106.00 and 106.10. Fundamentally, the US Initial Jobless Claims figure for the week ending Oct 10, 2020 was released yesterday by the US Department of Labor. The market was looking for a decline from 840K to 825K.
AUD/USD remains on the downside for 0.7005 support. Break will resume corrective fall from 0.7413. Next target is 38.2% retracement of 0.5506 to 0.7413 at 0.6685. On the upside, above 0.7128 minor resistance will mix up the outlook again and turn intraday bias neutral first.
USD/CAD’s fall from 1.3418 could have completed at 1.3099 already. Corrective rebound from 1.2994 is likely extending with another rising leg. Stays on the upside for 1.3418 first. Break will target 38.2% retracement of 1.4667 to 1.2994 at 1.3633. On the downside, break of 1.3099 will bring retest of 1.2994 low instead.
WTI crude oil remains in a consolidative state since prices appeared to top in the middle of August. The commodity has been ranging between support and resistance at 36.15 and 43.87 respectively. A bearish ‘Death Cross’ formed in early September as the 20-day Simple Moving Average (SMA) crossed under the 50-day SMA. However, oil also pushed through a falling trend line from January. Confirmation is however lacking.
On Thursday, spot gold climbed 0.4% to $1,908, though it is still on track for a weekly decline. Investors were cautious about a rebound in the U.S. dollar and diminishing chances of U.S. fiscal stimulus. On a daily chart, spot gold remains on the downside despite a recent rebound. In fact, it is capped by the lower boundary of the previous trading range and the 50-day moving average. The level at $1,935 might be considered as the nearest resistance, with the 1st and 2nd support at $1,872 and $1,848 likely to be tested again.
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