EUR/USD is flashing red on Thursday as the anti-risk dollar is drawing haven bids on reports of meddling in US elections and fading prospects of a US fiscal stimulus deal. The pair is currently trading at 1.1842, representing a 0.13% drop on the day. The pair faced rejection above 1.1859 during the Asian trading hours. That level is the 61.8% Fibonacci retracement of the sell-off from the Sept. 1 high of 1.2011 to Sept. 25 low of 1.1612.
Yesterday’s rally led to a successful violation of the resistance zone at 1.3065 and a test of the higher one at 1.3146. In the early hours of trading today, the pair is trading under the aforementioned level, but a new test attempt is possible. If successful, this would strengthen the bullish sentiment and lead the currency pair towards the next target – the resistance zone at 1.3288. In the alternative scenario, negative news surrounding the Brexit talks could lead to a sell-off, erasing everything the pair has gained in the last couple of days and bringing the price in the range between 1.2891 and 1.3065.
The sharp decline of the dollar was limited around the support level coming from the bigger time frames at 104.50. At the time of writing, the USD/JPY is trading above the aforementioned zone, but as the depreciation of the USD against the major world currencies continues, a new negative move could easily lead to a test and successful breach of the lows from September at around 104.32. If bulls enter the market, a retracement towards the resistance level of 105.01 could be expected, but only a breach of the next target at 105.31 will change the current market sentiment.
EUR/JPY remains neutral as it retreated after failing 125.08 resistance. On the upside, break of 125.08 will target a retest on 127.07 high. On the downside, below 123.01 will target 38.2% retracement of 114.42 to 127.07 at 122.23. Firm break there will confirm resumption of whole corrective fall from 127.07.
Stronger than expected rebound in AUD/USD and break of 0.7114 minor resistance mixed up the near term outlook. On the upside, break of 0.7243 resistance will suggests that the correction from 0.7413 has completed and bring retest of this high. On the downside, through, break of 0.7005 will resume the correction to 38.2% retracement of 0.5506 to 0.7413 at 0.6685.
USD/CAD is turned neutral with a temporary low formed at 1.3081. Further decline is expected as long as 1.3259 resistance holds. Below 1.3081 will target 1.2994 low first. Break will resume the larger fall from 1.4667. However, break of 1.3259 resistance will extend the consolidation pattern from 1.2994 with another rising leg. Intraday bias will be turned back to the upside for 1.3418 instead.
The WTI Crude Oil market initially tried to rally during the trading session on Wednesday but found resistance above the 200 day EMA. The real problem is the longer-term lack of demand, and that does not look like it is changing anytime soon. Currently, we find ourselves trading between the $43.50 level and the $36.25 level underneath. We are roughly in the middle, so I would fully anticipate a lot of back and forth short-term scalping more than anything else. I prefer fading rallies that show signs of exhaustion on short-term charts because I think the longer-term trend is probably still to the downside. That being said, you must be cognizant of the fact that if we do break above the $43.50 level, we are probably racing towards the $45 level rather quickly. A breakdown below the $36.53 level would open up the door to the $35 level and below, but obviously, we are quite far from that happening.
Gold fails to scale 50-day SMA even as US inflation expectations rise Gold struggles to gather upside traction despite the uptick in the US inflation expectations. The yellow metal faced rejection above the 50-day simple moving average (SMA) at $1,923 early Thursday.
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