Euro has bounced well from 1.1745 in the last 2-sessions but we cannot negate a dip again towards 1.1745-1.1700 while Dollar Index trades higher. For now, we may look at a ranged movement within 1.19-1.17 on the Euro to sustain for the next 1-2 weeks.
GBP/USD upward momentum has more or less dissipated and the current movement is viewed as part of a consolidation phase’. However, instead of consolidating, GBP plummeted to an overnight low of1.3108 before closing on a weak note (1.3124, -0.75%). While the rapid and sharp drop appears to be overdone, there is room for GBP to dip to 1.3080 first before the current weakness should stabilize. The next support at 1.3040 is likely out of reach. Resistance is at 1.3150 followed by 1.3180. we did not quite expect the sharp drop yesterday (12 Nov) that took out our ‘strong support’ level of 1.3120 (low of 1.3108). The rapid loss in momentum suggests GBP is not ready to move higher just yet. From here, GBP could trade sideways within a broad 1.3000/1.3250 range for a period of time.
The US Dollar started a strong upward move from the 103.18 swing low against the Japanese Yen. USD/JPY broke the 104.00 and 104.50 resistance levels to move into a positive zone. Looking at the 4-hours chart, the pair even settled above the 104.80 resistance, the 100 simple moving average (red, 4-hours) and the 200 simple moving average (4-hours). Finally, there was a break above the 105.00 level, but the pair struggled to clear the 105.70 resistance. It seems like there is a connecting trend line forming with resistance near 105.70 on the same chart. To continue higher, the pair must break the 105.70 and 106.00 resistance levels in the near term. On the downside, the 105.00 level is a decent support. The next major support is near the 104.70 level and the 100 simple moving average (4-hours). The 50% Fib retracement level of the recent upward move from the 103.18 low to 105.67 high is also near the 104.72 level to provide support. Any further losses may perhaps lead the pair towards the 104.10 support level.
AUD/USD stays neutral and further rise is mildly in favor as long as 0.7221 support holds. Break of 0.7339 will target 0.7413 high first. Firm break there will resume larger rally from 0.5506. On the downside, however, break of 0.7221 will turn bias back to the downside to extend the consolidation pattern from 0.7413.A clear break above 0.7340 could open the doors for a push towards the 0.7400 resistance.
One of the most active pars on Thursday was the USD/CAD which jumped 77pips to 1.314. Looking at the chart, the pair remains in a consolidation pattern between 1.299 support and 1.342 resistance. A double bottom may be in play but is not confirmed until price action breaks above 1.342 resistance. The preference is for a rebound higher towards 1.365. A large trend reversal may be in the works.
The early price action suggests the direction of the December WTI crude oil market on Friday is likely to be determined by trader reaction to the short-term Fibonacci level at $40.25. A sustained move over $40.25 will indicate the presence of buyers. The first upside target is $41.61, followed by $43.06. Taking out the latter could trigger a surge into the August 26 main top at $44.33. A sustained move under $40.25 will signal the presence of sellers. This could trigger an acceleration into $38.99. If this fails this look for the selling to possibly extend into $38.35 to $37.24.
Gold has failed to recoup any of its fall. Gold continued to consolidate its losses, range-trading just above Monday’s low of USD1850.00 an ounce, which forms initial support. Rallies have been limited to brief forays above USD1880.00 an ounce, with gold finishing the overnight session -0.60% lower at USD1865.00 an ounce. It has crept higher to USD1870.00 an ounce in Asia as the dollar edges lower, in dull range trading. Gold finds itself in no man’s land now, hemmed in by support and resistance at USD1850.00 and USD1880.00 an ounce. The problem with being in no man’s land is that you are in danger of being shot at by both sides. The balance of risks suggests that the trauma of Monday has not yet passed. An extension of losses to USD1800.00 an ounce is still the most likely outcome.
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