The Euro failed to stay above the 1.1850 support level and declined heavily against the US Dollar. EUR/USD broke the key 1.1750 support level to move into a bearish zone. Looking at the 4-hours chart, the pair followed a bearish pattern from well above 1.1850. It broke a crucial contracting triangle with support near 1.1785 to start the current decline. The pair settled well below the 1.1750 support level, the 100 simple moving average (4-hours), and the 200 simple moving average (4-hours). The decline was such that the pair even broke the 1.1700 support level. It tested the 1.1640 level. If there is an upside correction, the 1.1680 and 1.1700 levels are likely to prevent gains. The next major resistance is near the 1.1750 level or the 100 simple moving average (4-hours). Conversely, the pair could continue to move down below 1.1640 and 1.1625. The next major support is near the 1.1600 level.
The GBPUSD is going under pressure against the USD, after listening news that the UK is about to go into a new COVID-19 lockdown this week. GBPUSD sellers may now target the 1.2700, and possibly the 1.2500 level ahead of tomorrow’s US election. Traders that are bullish towards the GBPUSD may have to wait until the 1.2500 level before the pair stages a meaningful recovery If the GBPUSD pair trades above the 1.2900 level, key resistance is found at the 1.3000 and 1.3060 levels. The GBPUSD pair is only bearish while trading below the 1.2900 level, key support is found at the 1.2700 and 1.2500 levels.
USD/JPY remains neutral first and further decline is mildly in favor with 105.85 resistance intact. Firm break of 104.00 will resume larger decline from 111.71, towards 101.18 low. On the upside, firm break of 105.05 will indicate short term bottoming and turn bias back to the upside for 106.10 resistance.
EUR/JPY remains on the downside at this point. Fall from 127.07 should target 61.8% retracement of 114.42 to 127.07 at 119.25, which is close to 119.31 key support. We’d look for strong support there to contain downside to bring rebound. On the upside, break of 122.89 minor resistance will turn intraday bias neutral first. But outlook will be neutral at best as long as 125.08 resistance holds.
AUD/USD revisits session lows seen during the early Asian trading hours, having faced rejection at 0.7025 following the release of an above-forecast China Caixin Manufacturing PMI at 01:30 GMT. The daily chart indicators suggest the risks are skewed to the downside. To start with, the MACD histogram, an indicator used to identify trend changes and trend strength, is producing deeper bars below the zero line. That's a sign of the strengthening of downward momentum. As such, deeper support levels 0.6921 (July 14 low) and 0.68 (200-day simple moving average). A close above the 10-day simple moving average would invalidate the bearish bias.
USD/CAD rises to 1.3365, an intraday high of 1.3370 during Monday’s Asian session. The loonie pair recently crossed a confluence of 100-day SMA and a falling trend line from June 26 amid the bullish MACD. As a result, the bulls are targeting September month’s high of 1.3420 while also concentrating on the October peak close to 1.3390 and the 1.3400 threshold as immediate upside barriers. If the bullish MACD favors USD/CAD buyers to clear 1.3420 resistance, the late-July high of 1.3459 and the June 23 low surrounding 1.3485 can return to the charts. On the contrary, a daily closing below 1.3320/25 technical joint can revisit the October 15 high of 1.3259. However, USD/CAD bears are less likely to get confirmation until the quote stays above October month’s trough near 1.3080.
Technically, WTI crude oil is now sitting at a key support zone after the fall from 43.50 resumed last week. We'd still look for strong support from 100% projection of 43.50 to 35.98 from 41.62 at 34.10, which is close to 34.36 structural support to contain downside and bring rebound. But firm break of 36.42 is needed to indicate short term bottoming first. Or, further fall remains in favor. Sustained break of 34.10 could bring further downside acceleration as fall from 43.50 is developing into a trend, for 161.8% projection at 29.45.
From a technical point of view, spot gold stays on the downside as shown on the daily chart. It remains capped by a declining trend line drawn from August, with a shorter-term bullish trend line broken. The level at $1,925 might be considered as the nearest resistance, while the 1st and 2nd support are expected to be located at $1,849 and $1,815 respectively.
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