EUR/USD

We have seen a slow start for the FX market today despite some economic releases that come from the Eurozone.

In Germany, all the preliminary readings for the Manufacturing, the services and the composite PMI’S showed an increase during October. The services PMI jumped to 54.1 up from 50.9 registered previously, the Manufacturing sector overtook estimates of 54.4 and showed a figure of 55.1, while the composite PMI increased to 55.1 against 52.8 only in September.

These figures gave some demand to the single currency, which managed to bounce during the European trading. The Euro found a low around 1.0860 support before to trade higher in the direction of 1.0894 level.

Looking at the actual technical picture, the pair remain bearish from both a short and med-term perspective. This view has strengthened last week after prices succeeded to decline below the 1.0910 weekly support, bringing a strong negative signal for this pair.

As of the week ahead, 1.0912 is seen as the short-term barrier while 1.0945/50 resistance zone is key for the future price action. Therefore, a move back towards the mentioned above zone is likely to see new sellers trying to push prices lower for another impulsive wave in the direction of 1.08000 psychological support.

To conclude, the Euro still under pressure below 1.1040 peak in the daily chart, consequently the upside momentum should remain limited in the coming days unless a close above this high occur.

GBP/USD

The British pound traded lower overnight and prices did a re-test of 1.2185/70 support zone before to jump following the European open.

Cable managed to trim its daily losses, reinforcing the probability of a potential bullish reversal in the short-term, the pair showed a strong engulfing candle in the 4-hour chart, in the meantime prices are testing a big resistance located around 1.2250 level.

Meanwhile, technical indicators turned positive, which can lead to another extension to the upside towards 1.2270 barrier (61.8% retracement from 1.2330 peak), before the current rally stall.

Traders should focus on 1.2220 low in the first degree, followed by 1.2185 low in the next degree. Therefore, as long as the pair continue to trade above this demand zone, the trend will remain bullish in the near-term.

Moreover, a break above 1.2270 level should expose last week high at 1.2330.

USD/JPY

The pair continue to trade sideways in the near-term between 104.20 in the upside and 103.50 in the downside.

Therefore, traders should wait for a clear break outside of this range bound to have more clues about the coming price action.

Looking at the hourly chart, the pair showed a 3-wave corrective structure from 104.60 peak during last week and managed to bounce from 103.15 support followed by another rebound from the 61.8% retracement of the short-term cycle that comes from 103.15 low to 104.20 high.

This technical picture is showing that the bulls are still in the control of this pair and a daily close above 104.20 high can clear the path for another rally in the direction of last week high. In the opposite, a breakdown below 103.50 support should expose 103.15 area.

USD/CAD

The pair end last week on a very positive note as prices succeeded to overtake the weekly resistance of 1.3300, boosted by weak inflation data from Canada.

As of now, bulls may continue to push prices in the direction of 1.3400 barrier in the coming days, and if the pair retrace lower, then we expect strong buyers to appear around 1.3290/70 zone for another big rally.

The technical indicators remain strongly bullish, which reinforces the odds for a continuation higher. In the flipside, only a daily close below 1.3220 support will cancel this positive outlook.

AUD/USD

The Aussie failed to break above 0.7730 daily resistance and has showed a strong bearish engulfing candle during last Thursday, which may call for a larger correction to the downside soon.

In addition, we have seen a big decline in commodity currencies across the board, which give more support to this correlation analysis.

Technically, the recent price action took the form of a reversal head and shoulders pattern, therefore, another re-test of 0.7580/70 support zone is likely as far as 0.7650 resistance is intact.

In the opposite, a daily close above this peak will weaken the bearish momentum.

NZD/USD

After the big bounce seen in the kiwi since the beginning of last 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 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.