EURUSD continues to face risk of further upside pressure as we enter a new week. Resistance comes in at the 1.1750 with a break of that area turning risk towards the 1.1800 level. A move above here will target the 1.1850 level. Further up, resistance stands at the 1.1800. On the down, support comes in at 1.1700 levels with a violation opening the door for a run at the 1.1650 level. Further down, support is seen at the 1.1600 level. A cut through that level will clear the way for a move towards the 1.1550 level. All in all, EURUSD looks for more upside pressure.
The British pound sterling recovered from the losses in the week before, by closing last week with gains. Price action remains flat both on the weekly charts as well as on the 4-hour chart time frame. Trading within the 1.3000 and the 1.2750 levels, a breakout is likely to occur in the medium term. The flat price action reflects a number of underlying factors including the uncertain outlook of the economy and the Brexit trade talks. In the short term, the cable is likely to maintain this range. A breakout from the range is likely to coincide with some major fundamentals driving price action. To the downside, a close below 1.2750 will open the way for price to test 1.2516. To the upside, above 1.3000, we expect the resistance level at 1.3122 to hold.
Intraday bias in USD/JPY remains neutral for the moment. On the upside, break of 105.80 will resume the rebound from 104.00 to 106.94 resistances next. on the downside, break of 104.92 will suggest completion of rebound from 104.00. Intraday bias will be turned back to the downside for retesting this low. In the other picture, USD/JPY is still staying in long term falling channel that started back in 118.65 (Dec. 2016). Hence, there is no clear indication of trend reversal yet. The down trend could still extend through 101.18 low. However, sustained break of 112.22 resistances should confirm completion of the down trend and turn outlook bullish for 118.65 and above.
Today AUD/USD remains neutral first. On the upside, break of 0.7209 and sustained trading above 0.7192 should confirm completion of the pull back from 0.7413. Further rise should be seen back to retest 0.7413 high. On the downside, break of 0.7005 will resume the correction to 38.2% retracement of 0.5506 to 0.7413 at 0.6685. On the other hand, while rebound from 0.5506 was strong, there is not enough evidence to confirm bullish trend reversal yet. That is, it could be just a corrective inside the long term up trend. Sustained trading back below 55 week EMA (now at 0.6896) will favor the bearish case and argue that the rebound has completed. Focus will be turned back to 0.5506 low. On the upside, break of 0.7413 will extend the rise from 0.5506 to 38.2% retracement of 1.1079 (2011 high) to 0.5506 (2020 low) at 0.7635.
Intraday bias in USD/CAD remains neutral for the moment. Further rise is mildly in favor with 1.3259 resistances turned support intact. On the upside, break of 1.3418 will resume the rebound from 1.2994. Such rebound is seen as a correction to whole fall from 1.4667 and should then target 38.2% retracement of 1.4667 to 1.2994 at 1.3633. Nevertheless, on the downside, sustained break of 1.3259 will argue that the rebound is completed and turn bias back to the downside for retesting 1.2994 low. On the other hand, fall from 1.4667 is seen as the third leg of the corrective pattern from 1.4689 (2016 high). Sustained break of 61.8% retracement of 1.2061 to 1.4667 at 1.3056 will target a test on 1.2061 (2017 low). But we’d expect loss of downside momentum as it approaches this key support. On the upside, firm break of 1.3715 resistance will argue that this falling leg has completed and turn focus back to 1.4667/89 resistance zone.
Total gold held by ETFs rose 34% this year to 110.90 million ounces as of October 1, approaching the record high level, according to Bloomberg’s data. Besides, the net long position of gold futures was down 1.6% on week to 128,953 contracts as of September 29, according to the Commodity Futures Trading Commission. From a technical point of view, spot gold posted a rebound from $1,848 after breaking a symmetric triangle on a daily chart. Currently, gold prices are trading below the declining 20-day moving average. The relative strength index is also below its neutrality level at 50, suggesting the lack of upward momentum. Bearish readers could set the resistance level at $1,935, while support levels would be located at $1,848 and $1,815 respectively
Oil prices continue to move lower, marking a second consecutive week of declines. Following the breakdown below the 38.83 level of support, oil prices are now trading close to the 36.5 level of support. A retest of this support is inevitable, but it could offer temporary relief for prices from falling further. If there is a bounce off this lower support area, we could see some sideways movement between 36.50 and 38.83. But a close below the 36.50 level of support could signal further declines. The upside remains weak for the moment. Any gains could see the 38.83 level coming in as resistance and putting a lid on any further gains.
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