EUR/USD

The Euro extended its decline as expected following ECB president Draghi yesterday and prices have reached an 8-month low today reinforcing the bearish outlook in this pair.

Technically, the breakdown below 1.0910 weekly support confirmed a major reversal in the med-term, and for the time being, further weakness is likely in the coming days that can send the single currency to as low as 1.0798 level.

Looking at the week ahead, the technical picture remains strongly bearish and a continuation lower still possible, however 1.0850 area should provide a temporary support as traders may begin to book profits during the beginning of next week.

In the opposite, if the pair manage to recover in the direction of 1.0912-1.0930 area, then we expect strong sellers to appear again for another dip to the downside as mentioned above.

USD/JPY

The pair remain bullish for the time being as long as prices keep trading above 102.80 support.

However, it is important to note that the daily trend still negative and traders have to wait for a daily close above 104.50/60 zone to confirm an effective bullish reversal in the daily chart.

As we can see, sellers tried to push prices below 103.30 support, but failed as the pair succeeded to bounce from 103.15 level, keeping the downside potential limited for the time being.

Actually, we will watch 104.10/20 resistance zone carefully, as it represents a strong barrier for this pair and a daily close above it, should clear the path for a re-test of 104.60 peak in the coming days.

In the flipside, a daily close above 103.15 support, is likely to extend the decline towards 102.80 followed by 102.40 support in extension.

GBP/USD

Cable rally stalled around 1.2330 daily resistance and we have seen a clear decrease in the recent bullish momentum, warning about a potential continuation to the downside in the following days.

Meanwhile, the pair still can do another push higher as prices found strong support near 1.2178 level, which coincide with the 61.8% Fibonacci retracement of the entire recovery from 1.2088 low.

In the coming days, the focus should be on 1.2255/75 resistance zone, as only a clear breakout above it, is likely to confirm another re-test of 1.2330 high. In the flipside, a daily close below 1.2170 support will call for more decline towards 1.2088 support.

To summarize, the daily trend remains bearish, however the hourly picture is neutral and traders should wait for a break of one the technical zones highlighted before to get more clues about the direction of this pair in the short-term.

AUD/USD

The Australian Dollar turned sharply lower, after a very volatile week for commodity currencies. The Aussie showed a strong bearish engulfing candle yesterday, which was confirmed today with a breakdown below 0.7620 support.

As of now, the pair is likely to keep trading lower in the direction of 0.7580/60 support zone before to see some stabilization in the current sell-off. Looking at the biggest picture, the pair still fighting for a clear direction and despite the higher low structure seen in the daily chart, prices failed to overtake 0.7730 daily resistance, which keeps the outlook neutral in the near-term.

Technically, a move below 0.7580/60 support area can be the beginning of a new impulsive wave to the downside that can reach 0.7500 psychological support again.

In the opposite, a 4-hour close above 0.7650 resistance can be a very strong positive signal and prices can re-test 0.7730 area in the coming days.

NZD/USD

After the big bounce seen in the kiwi since the beginning of this week, the pair has reached a key technical resistance located at 0.7260, which represent the 50% retracement of the entire cycle that comes from 0.7482 peak to 0.7031 low before to begin a deeper correction to the downside.

In the hourly chart, the move back towards 0.7180/70 support zone today did not provided strong support for the pair, which increase the possibility of a deeper correction in the direction of 0.7120 daily support.

In the other side, an hourly close above 0.7267 peak is needed to confirm another rally in the direction of 0.7306 resistance. To conclude, the pair remain bullish in the daily chat, however, the hourly chart turned negative, consequently we prefer to stay away from this pair for the time being until we get a clear technical picture soon.

USD/CAD

The pair rallied as mentioned in our previous report boosted by weak inflation data in Canada during September. The Loonie soared against the U.S Dollar and prices succeeded to overtake 1.3312 weekly resistance, which may clear the path for a big rally in the direction of 1.3400/1.3430 zone.

In the week ahead, if prices retrace lower in the direction of 1.3290/75, then we should strong demand for another wave of strength as long as prices continue to hold above 1.3225 low.

Looking at the short-term price action, 1.3350 is the hourly resistance and could stop the current advance temporary, however, any downside reaction is likely to be short-lived as the bearish potential remain limited in USD/CAD.

To conclude, momentum indicators turned positive in this pair, which keep the outlook strongly bullish for the coming week, consequently, traders may continue to buy the pair on dips until we reach the 1.3400/1.3430 weekly resistance area.

While a daily close below 1.3225 low should weaken this positive scenario.