As we can see in the H4 chart, the asset continues trading upwards. After forming several reversal patterns, such as Engulfing, not far from the support level, XAUUSD is reversing and may form a new rising impulse. In this case, the upside target may be the resistance area at 1810.00. At the same time, an opposite scenario implies that the price may correct towards 1755.00 first and then resume trading upwards.
NZDUSD, “New Zealand vs US Dollar”
As we can see in the H4 chart, NZDUSD has formed several reversal patterns, such as Engulfing, close to the support level. At the moment, the asset is reversing in the form of a new growth. In this case, the upside target may be the resistance area at 0.7190. After that, the asset may break it and continue moving upwards. However, an alternative scenario implies that the price may correct to reach 0.7105 before resuming its ascending tendency.
GBPUSD, “Great Britain Pound vs US Dollar”
As we can see in the H4 chart, GBPUSD has formed several reversal patterns, such as Hammer, not far from the support area during the pullback. At the moment, the pair is reversing in the form of another growth. In this case, the upside target may be at 1.3860. After testing the resistance level, the market may break it and continue growing. Still, there might be an alternative scenario, according to which the asset may correct towards 1.3715zbefore resuming the uptrend to reach the resistance level.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
The daily chart of EURUSD shows that after finishing the “bearish” phase close to 50.0% fibo at 1.1493, the asset is starting a new movement to the upside. Convergence on MACD says this movement may be both a correction and a reversal to break the high at 1.2350. After the pullback is over, the pair may resume moving downwards to reach 50.0% and 61.8% fibo at 1.1493 and 1.1293 respectively.
The H1 chart shows the potential correctional targets after local convergence on MACD – 23.6%, 38.2%, and 50.0% fibo at 1.1700, 1.1808, and 1.1895 respectively. On the other hand, a breakout of the low at 1.1529 will lead to a further downtrend.
USDJPY, “US Dollar vs. Japanese Yen”
As we can see in the daily chart, USDJPY is forming a wave to the upside; it has already broken the post-correctional extension area between 138.2% and 161.8% fibo at 112.78 and 113.47 respectively and is currently heading towards 261.8% fibo at 116.40. The support is still the local low at 108.72.
The H4 chart shows divergence on MACD, which may indicate a possible descending correction soon towards 23.6%, 38.2%, and 50.0% fibo at 113.20, 112.42, and 111.78 respectively. The key resistance here is the high at 114.46.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
Germany is considering ending the state of emergency on November 25. Germany’s inflation has risen rapidly in recent months, so the country needs to improve its economic climate. At its September meeting, the ECB postponed several important decisions until December. Still, since then, rising energy prices have pushed Eurozone inflation to a 13-year high of 3.4% in annual terms, and analysts expect it to continue rising.
From the technical point of view, the EUR/USD trend on the hour timeframe has changed to bullish. In the Asian session, the price confidently broke through the priority change level. But the MACD indicator is already showing signs of the buyer’s weakness. Under such market conditions, traders should consider buying positions from the support levels near the moving average or the buyer’s initiative areas. It is best to look for sell trades from the resistance levels of the higher timeframe.
Alternative scenario: if the price breaks down through the 1.1548 support level and fixes below, the mid-term uptrend will likely be broken.
News feed for 2021.10.19:
– US Building Permits (m/m) at 15:30 (GMT+3);
– US FOMC Member Daly Speaks at 18:00 (GMT+3);
– US FOMC Member Bostic Speaks at 21:50 (GMT+3).
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.3747
Prev Close: 1.3728
% chg. over the last day: +0.14%
The number of British power companies that have gone bankrupt since early September amid soaring natural gas prices has reached 13. Today investors will closely follow the speech of the head of the Bank of England. According to JPMorgan, the Bank of England will raise the interest rate by 15 bps in November and by another 25 bps in February and in August next year.
Trading recommendations
Support levels: 1.3685, 1.3617, 1.3584, 1.3532, 1.3457, 1.3360, 1.3282
Resistance levels: 1.3772, 1.3812, 1.3886
On the hourly time frame, the GBP/USD trend is bullish. The British pound is strengthening due to its direct correlation with oil prices and the weakness of the dollar index. The MACD indicator is in the positive zone, but there are the first signs of buyer’s weakness. Buy trades should be considered only within the day and only from the initiative zone of the buyers. It is better to look for sell deals from the resistance levels, but after an additional confirmation in the form of a sellers’ initiative, because the buyers’ pressure is higher now.
Alternative scenario: if the price breaks down through the 1.3532 support level and consolidates below, the bullish scenario is likely to be broken.
News feed for 2021.10.19:
– UK BoE Gov Bailey Speaks at 15:05 (GMT+3).
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 114.16
Prev Close: 114.31
% chg. over the last day: +0.13%
Several representatives of the Bank of Japan said that the current stimulative monetary policy should be maintained for a longer period, as the Japanese economy is not coping as well as other advanced economies in the aftermath of the pandemic. That is a negative signal for the JPY since with the US Fed cutting its stimulus program soon, the dollar index might increase, which would lead the USD/JPY currency pair to grow further.
Trading recommendations
Support levels: 113.66, 113.25, 112.19, 111.53, 110.99, 110.65, 109.95, 109.63
Resistance levels: 114.40
The main trend of the USD/JPY currency pair is bullish. The price is trading flat, and a triangle pattern is forming. The MACD indicator has become inactive. However, there is still a divergence in higher time frames, which means that growth is limited, and correction is expected soon. Under such market conditions, it’s better to look for buy positions from the support levels near the moving average since the price has deviated greatly from the average line. Sell positions should be considered only throughout the day from the resistance levels, given there is sellers’ initiative.
Alternative scenario: if the price falls below 112.19, the uptrend is likely to be broken.
There is no news feed for today.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.2367
Prev Close: 1.2377
% chg. over the last day: +0.08%
The Canadian dollar is a commodity currency, so USD/CAD is highly dependent on the dynamics of the dollar index and oil prices. Both the dollar index and oil prices declined yesterday. As a result, the USD/CAD currency pair remained approximately at the same level.
From the technical point of view, the trend of the USD/CAD currency pair is bearish. But the price has reached the daily support level. The MACD indicator has become inactive, but there are still signs of divergence on higher time frames. Under such market conditions, it is better to look for sell deals from the resistance levels near the moving average. Buy trades should be considered only on lower time frames from the support levels if there is the buyer’s initiative.
Alternative scenario: if the price breaks out through the 1.2518 resistance level and fixes above, the uptrend will likely resume.
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
As the world prepares itself for winter and the deciding quarter of 2021, uncertainty continues to dominate the markets due to the Delta variant.
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The world’s reserve currency maintained its consolidative mood last week and moved around 12-month highs, although it briefly broke higher on Wednesday, when it reached its highest point since late September 2020. Overall, the US dollar continues to buck the general trend of high risk appetite in financial markets.
USD
US economic data was good. The country’s September retail sales were 14.0% higher than in the same period a year earlier. There is a lot of discussion in the market about disruptions in supply chains, which are partially reducing the availability of goods. One example of this, the car manufacturer Toyota reported an expected -15% drop in November production volumes due to a shortage of components. Another important data point was the September headline inflation rate, which stood at 5.4% year-on-year and has remained stable above the 5% level for the 4th month in a row. Contrary to what the central bank has been communicating, inflation is not retreating and remains high, and the shelter component is a significant contributor to this trend, which has shown a consistent recovery since the beginning of the year and accounts for as much as a third of the overall inflation index. The producer price index was also published, which rose by 8.6% year-on-year and recorded another new cycle high, suggesting that inflationary pressures from this sector are persisting and will continue to spill over to the rest of the economy. In the labour market, the shortage of workers remains severe, with the number of open positions at 10.44 million, only marginally retreating from historical highs. The number of new jobless claims fell further from 0.326 million to 0.293 million during the week.
The pandemic trend showed positive signs and the weekly average of global new cases fell from 408 to 402 thousand per day. Continental trends remained unchanged, with North America showing a -14% weekly decrease, Asia -8% and South America -19%, but Europe continued to grow and increased by +12% during the week. In the US, the data showed further improvement and the average dropped from 87 to 85 thousand per day. The number of vaccinations administered increased from 402 to 405 million, a change of 3 million. Overall in the US, the number of people vaccinated with at least one dose rose from 65.3% to 65.6% of the population, with a weekly increase of 0.3%. In Lithuania, the number of people vaccinated with at least one dose rose from 63.2% to 63.5%, a difference of 0.3%.
Euro
The main currency pair EUR/USD reflected the sentiment of the US dollar and depreciated to the level of 1.153 at the beginning of the week. Later, it recovered its losses and rose to the level of 1.160. Among the economic data in the Old Continent was the industrial production in August, which was 5.1% higher than at the same time a year ago. The ZEW economic sentiment index stood at 21.0 in Europe and 22.3 in Germany, both continuing their steady decline. The EUR/USD pair ended the week trading up 0.2%.
JPY
The most important Asian pair, USD/JPY, continued to show a strong appreciation sentiment, with the pair rising to the 114.2 level, the highest since October 2018. Economic data included the producer price index, which rose by 6.3% year-over-year, and the change in August industrial volumes, which reached 8.8% year-over-year. USD/JPY ended the week’s trading up 1.8%.
GBP
The British pound and US dollar pair showed positive sentiment and appreciated consistently throughout the week, ending trading at 1.375. Important economic data included labour market indicators with the unemployment rate at 4.5% and average earnings rising by 7.2% year-over-year. Industrial production in August was 3.7% higher than a year earlier. GBP/USD ended the week trading up 1.0%.
Economic Events
This week will start with important economic data from China, where economic growth, industrial production and retail sales will be published. This will be followed by US industrial production data on Monday. There are no major releases scheduled for Tuesday, while inflation figures for England and Europe are due on Wednesday. On Thursday, investors will be watching US existing home sales and on Friday Japanese inflation, English retail sales and the preliminary results of the purchasing managers’ index.
According to Admiral Markets market sentiment data, 59% of investors have long positions in EUR/USD (down -8 percentage points compared to last week). In the main Asian pair USD/JPY, 10% of investors have long positions (down -1 percentage point). In GBP/USD, 24% of participants expect a rise (down -22 percentage points). Such market data is interpreted as a contrarian indicator, so that EUR/USD is likely to fall and USD/JPY and GBP/USD to rise. The analysis of positioning data should be combined with fundamental projections and technical analysis.
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The Australian dollar rallied after the RBA expected a return to growth in October’s meeting minutes.
The pair has met stiff selling pressure in the supply zone (0.7460) from the September sell-off. And the RSI is once again in the overbought area. Short-term buyers would be eager to take profit, driving the price lower in the process.
0.7380 is the first support and will test the bulls’ resolve. A bounce above the said resistance would trigger an extended rally. On the downside, a bearish breakout may cause a correction to 0.7320.
USDCHF sees limited rebound
The US dollar recoups some losses supported by recovering Treasury yields.
The drop below the demand zone around 0.9230 has put the bulls under pressure. An oversold RSI has triggered the buy-the-dips mentality at the fresh support at 0.9200.
The buy-side will need to clear the hurdle at 0.9310 to reclaim control of the direction. Otherwise, the latest rebound may be an opportunity for the bears to sell into strength.
A new round of sell-off would send the pair towards the daily support at 0.9100.
A rebound above the psychological level of 15000 suggests strong buying interest in keeping the rally intact in the medium-term. The RSI’s overbought situation has temporarily held the impetus back. A retracement is likely to attract bids in the vicinity of 15050.
15400 is a major resistance from the daily timeframe and its breach may resume the uptrend above 15700. Failing that, 14800 is a key floor on the downside.
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EURUSD is trading at 1.1571; the instrument is moving inside Ichimoku Cloud, thus indicating a sideways tendency. The markets could indicate that the price may test the cloud’s downside border at 1.1555 and then resume moving upwards to reach 1.1675. Another signal in favour of a further uptrend will be a rebound from the descending channel’s upside border. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 1.1520. In this case, the pair may continue falling towards 1.1430. To confirm further growth, the asset must break the cloud’s upside border and fix above 1.1625.
BRENT
Brent is trading at 85.48; the instrument is moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test Tenkan-Sen and Kijun-Sen at 84.05 and then resume moving upwards to reach 91.55. Another signal in favour of a further uptrend will be a rebound from the rising channel’s downside border. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 79.45. In this case, the pair may continue falling towards 76.55.
USDJPY, “US Dollar vs Japanese Yen”
USDJPY is trading at 114.30; the instrument is moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test the cloud’s upside border at 113.95 and then resume moving upwards to reach 115.35. Another signal in favour of a further uptrend will be a rebound from the support level. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 113.35. In this case, the pair may continue falling towards 111.65.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
As we can see in the H4 chart, the asset has completed the correction by forming several reversal patterns, including Harami, close to the resistance level. At the moment, EURUSD may reverse and start a new decline. In this case, the downside target may be at 1.1500. Later, the market may break the support area and continue trading downwards. However, an alternative scenario implies that the price may correct to reach 1.1650 first and then resume trading downwards.
USDJPY, “US Dollar vs Japanese Yen”
As we can see in the H4 chart, USDJPY has formed several reversal patterns, for example, Hanging Man, while testing another resistance area. At the moment, USDJPY is reversing and may start a new correctional impulse towards the support level. In this case, the correctional target may be at 113.60. At the same time, an opposite scenario implies that the price may continue growing towards 114.95 without any corrections.
EURGBP, “Euro vs Great Britain Pound”
As we can see in the H4 chart, after forming several reversal patterns, such as Inverted Hammer, near the support level, EURGBP may reverse and start a new pullback. In this case, the correctional target may be at 0.8484. Later, the market may test the resistance area, rebound from it, and resume the descending tendency. Still, there might be an alternative scenario, according to which the asset may continue falling to reach 0.8400 without testing the resistance area.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
Germany’s inflation expectations continue to rise as markets no longer view inflation as a temporary phenomenon but as something more permanent. The German inflation expectation index increased up to 1.80%, the highest level since April 2013.
From the technical point of view, the EUR/USD trend is bearish. The price failed to break through the priority change level. The MACD indicator has become inactive. Under such market conditions, traders should consider selling deals from the priority change level, given there is a sellers’ initiative. Buy trades should be considered only on lower time frames from the support levels or from the buyers’ initiative areas.
Alternative scenario: if the price breaks through the 1.1615 resistance level and fixes above, the mid-term uptrend will likely resume.
News feed for 2021.10.18:
– US Industrial Production (m/m) at 16:15 (GMT+3).
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.3671
Prev Close: 1.3744
% chg. over the last day: +0.53%
The UK reports on inflation this week. Analysts expect consumer prices to rise and fear that the inflation rate will increase above 3.2%. Investors and funds will be watching the report closely in anticipation that the Bank of England will raise interest rates before the end of the year to combat rising inflation.
Trading recommendations
Support levels: 1.3685, 1.3617, 1.3584, 1.3532, 1.3457, 1.3360, 1.3282
Resistance levels: 1.3759, 1.3812, 1.3886
On the hourly time frame, the GBP/USD trend has changed to bullish. The British pound is strengthening due to its direct correlation with oil prices. The MACD has become inactive. Buy trades should be considered only within the day and only from the initiative zone of the buyers. It is better to look for sell deals from the resistance levels, but only after an additional confirmation in the form of a sellers’ initiative because the buyers’ pressure is higher now.
Alternative scenario: if the price breaks down through the 1.3532 support level and consolidates below, the bullish scenario is likely to be broken.
There is no news feed for today.
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 113.66
Prev Close: 114.25
% chg. over the last day: +0.52%
Japan will launch a 100 billion yen ($875 million) fund in 2022 to promote modern technology and economic security. The fund’s investments will go to universities and companies for research and development in technological areas that the Japanese government considers a priority. It also became known that Prime Minister Kishida intends to call on producers of oil to increase production.
Trading recommendations
Support levels: 113.66, 113.25, 112.19, 111.53, 110.99, 110.65, 109.95, 109.63
Resistance levels: 114.40
The main trend of the USD/JPY currency pair is bullish. The Japanese yen is rapidly declining against the US dollar. The MACD indicator is in the positive zone. However, there is a divergence on higher time frames, which means that growth is limited, and correction is expected soon. Under such market conditions, it’s better to look for buy positions from the support levels near the moving average since the price has significantly deviated from the average line. Sell positions should be considered only throughout the day from the resistance levels, given there is sellers’ initiative.
Alternative scenario: if the price falls below 112.19, the uptrend is likely to be broken.
There is no news feed for today.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.2366
Prev Close: 1.2358
% chg. over the last day: -0.06%
The Canadian dollar is a commodity currency, so USD/CAD is highly dependent on the dynamics of the dollar index and oil prices. The dollar index was trading flat on Friday while oil prices were slowly growing. As a result, the USD/CAD currency pair is decreasing due to the growth in oil prices and the Canadian dollar strengthening.
From the technical point of view, the trend of the USD/CAD currency pair is bearish. But the price has reached the daily support level, which will at least give a bounce. The MACD indicator has become inactive, but there are still signs of divergence on higher time frames. Under such market conditions, it is better to look for sell deals from the resistance levels near the moving average. Buy trades should be considered only on smaller time frames from the support levels if there is the buyer’s initiative.
Alternative scenario: if the price breaks out through the 1.2565 resistance level and fixes above, the uptrend will likely resume.
News feed for 2021.10.18:
– Canada BoC Business Outlook Survey (m/m) at 17:30 (GMT+3).
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
The current structure of the USDCHF pair suggests the development of a cycle wave y, which hints at a double zigzag Ⓦ-Ⓧ-Ⓨ of the primary degree. Let’s pay attention to the last primary wave Ⓨ, which is under development.
Wave Ⓨ has a complex internal structure and is likely to take the form of a triple combination (W)-(X)-(Y)-(X)-(Z). It is possible that the actionary waves (W) and (Y) and the intervening waves (X) and (X) have already ended.
We can expect the end of wave y near 0.947. At that level, the primary wave Ⓨ will be at 161.8% of wave Ⓦ.
Let’s consider an alternative scenario, according to which the formation of the cycle wave y has come to an end. It took the form of a primary double zigzag.
If this assumption is correct, then at the moment we are in the initial part of a new bearish wave.
We can assume that in the upcoming trading weeks, the market will move in a downward direction within the intermediate impulse, or rather in the intermediate wave (3). This is indicated on the chart below the minimum of 0.901 and it was marked by the primary intervening wave Ⓧ.
Orbex is a fully licensed broker that was established in 2011. Founded with a mission to serve its traders responsibly and provides traders with access to the world’s largest and most liquid financial markets. www.orbex.com
