Daily Technical Analysis for Majors by Dukascopy

[KristinaDC]

XAU/USD surges amid political changes in Saudi Arabia

A sudden cleansing in the Saudi establishment enhanced uncertainly about the situation in the Middle East and, as a result, magnified demand for gold. On hourly chart this search for safe haven assets signified creation of a second reaction low a two-week long junior ascending channel. Moreover, the rapid surge allowed the pair to rapidly reach the weekly R1 at 1,281.00. As markets have calmed down already, bears are expected to start pushing the pair back to the bottom. However, there is little chance the rate will succeed to return back to support zone near 1,268.00, as the road to the south is obstructed by a combination of the 55-, 100- and 200-hour SMAs together with the weekly PP at 1,273.35. Unless the rate receives a proper impulse, it is expected to halt the fall there.

 

[KristinaDC]

EUR/USD trades near 1.16 amid Chinese data release

The currency exchange rate continued to move in southern direction under pressure from the 55-hour SMA. A short dip below the weekly S1 located at the 1.1573 level as well as the subsequent recovery signified two confirmation points, thus confirming existence of a fully-fledged junior descending channel. As the upper-trend line of the pattern is additionally protected by the slipping 100- and 200-hour SMAs, the pair is not expected to make a sudden breakout to the north. Accordingly, today the exchange rate is expected to test an area near the 1.1555 mark, which might represent a notable support barrier. The average market sentiment, which remains 58% bearish, confirms this general direction. However, the above assumption might be altered due to beginning of Trump visit to China.

 

[KristinaDC]

GBP/USD forms ascending triangle pattern

During the previous trading session the currency rate expectedly returned back to the 1.3110 mark, which represents location of the 23.6% Fibonacci retracement level. As this barrier was additionally backed up by the 55-hour SMAs, it made a rebound. However, the fact that the cable failed to climb above the 50% retracement level at 1.3180 two times in a row as well existence of a slope that lies along rising 55-hour SMA indicates on existence of a minor ascending triangle pattern. If this assumption is true, then the pair is likely to make a breakout to the top already by the end of the day due to existence of combined support barrier formed by above 55- and 100-hour SMAs, the 38.2% retracement level and the weekly PP at 1.3150.

 

[KristinaDC]

USD/JPY slips in new channel down

As it was expected, different news coming from the United States and Asia created a downside momentum that allowed traders with bearish outlook to push the currency pair down to the 113.65 level. The further deprecation of the buck was stopped by a slope consisting from October 16 and October 31 minimums. An existence of this support barrier as well as President Trump’s arrival to China suggests that the currency rate might resume the surge despite the pressure from 200-, 100- and 55-hour SMAs. On the other hand, over the last two days the pair has formed a minor descending channel, which implies that the above moving averages should be strong enough to force the rate to make a rebound from the upper boundary of that pattern.

 

[KristinaDC]

XAU/USD fluctuates between 1,275 and 1,280

As there were no breaking news yesterday, recovery of the buck was expectedly neutralized by combined support level set up by the 55-, 100- and 200-hour SMAs together with the weekly PP at 1,273.35. In the meantime, lowering interest for safe haven assets as well as existence of the monthly PP at 1,279.41 did not allow the pair to make a fully-fledged rebound either. For this reason, the rate is expected to continue moving in this limbo until traders receive a proper signal that will allow making a decisive breakout. Most probably such signal will come from China, where Donald Trump is expected to announce conclusion of different deals that would allow narrowing the gap in the US trade balance. In that case, the buck has a chance to reach the bottom edge of the channel in the next one-two days.

 

[KristinaDC]

EUR/USD tries to bypass 1.1603

Despite that American and Chinese companies signed deals worth $253.4B over the last two days, the currency exchange rate stayed neutral. Most probably such hesitations, which result in relentless attempts of the pair to break through resistance area near the 1.6003 level, are related to concerns that Trump’s tax reform could be delayed. On the one hand, it looks like the surge should be neutralized, as that zone is additionally secured by the 100-hour SMA. On the other hand, yesterday’s movement points out formation of a new minor ascending channel, which already consists of three reaction lows. From this perspective, the exchange rate is likely to climb to the next resistance level located between the 200-hour SMA at 1.1621 and the weekly PP at 1.1631.

 

[KristinaDC]

GBP/USD sinks amid Priti Patel scandal

During the previous trading session the cable was in perfect situation to make a rebound from combined support level formed by the 55-hour SMA, the weekly PP as well as the 38.2% retracement level and make a breakout from the ascending triangle pattern. However, another political scandal in the British government led to rapid sell-off of the Pound. As a result, the exchange rate got in a tricky situation. On the one hand, further road to the south is blocked by the 100-day SMA and the lower line of a large symmetrical triangle. This disposition supports intention of bulls to return the pair back to the pre-fall 1.3175 level. However, in order to achieve this goal, the rate needs to pass through combined resistance set up by the above retracement level, the weekly PP and the 55-hour SMA.






USD/JPY plunges amid BoJ Summary of Opinions release

A release of the Bank of Japan Summary of Opinions as well as ongoing concerns over delay of the Trump’s tax reform implementation continued to push the exchange rate in southern direction. In technical terms, this downward movement is expressed in one-week long descending channel, which consist of three reaction highs and lows. As in early morning the pair made a rebound from an upper trend-line of the pattern, the rest of the day it is expected to spend either in a red zone or in consolidation. This assumption is supported by the fact that the northern side accumulated all active barriers, such as the 55-, 100- and 200-hour SMAs plus the weekly PP. Moreover, the closest support area is supposedly located only near the 113.40 mark.








XAU/USD heads to upper edge of ascending channel

Pressure of the 55-, 100- and 200-hour SMAs prevailed over the combined resistance formed by the 61.8% retracement level and the monthly PP. As a result, the exchange rate approached and tested the upper trend-line of a large ascending channel. Although the first attempt was not successful, the pair is expected to continue climbing to the top, using support provided by the above moving averages plus the weekly R1 located at the 1,281.00 level. There is a need to notice that on daily chart the pair faces no barriers on its way up until the weekly R2 at 1,291.92. This fact as well as the aggregate market sentiment, which is 63% bullish, suggests that the rate has a high probability to breakout from the channel up, instead of making a rebound near the 1,288.00 mark.

 

[KristinaDC]

EUR/USD advances in ascending channel

The Dollar was quoted weaker against the Euro on Thursday amid concerns that the Senate would postpone corporate tax cuts until 2019. The situation did not improve even when the House relevant committee approved the current tax plan. On hourly chart these changes resulted only in minor adjustments of the current ascending channel boundaries. As an area near the 1.1630 level represents location of the weekly PP, the 55-, 100- and 200-hour SMAs, the exchange rate is not expected to make major advances in the southern direction. On the other hand, starting from the 1.1660 and up until the 1.1680 mark the pair will face different resistance barriers, including the 23.6% Fibonacci retracement level, which most probably are going to hamper the pair from active surging as well.

 

[KristinaDC]

GBP/USD struggles to bypass 200-hour SMA

As it was expected, a combined resistance barrier formed by the weekly PP and the 38.2% Fibonacci retracement level managed to constrain the cable near the 1.3150 level.

Unless the Pound receives a proper impulse from some fundamental even, there is a little chance that it will manage to bypass the 200-hour SMA. But even in the best-case scenario the pair is unlikely to break above another resistance area this time protected by the 50% Fibonacci retracement level at 1.3180. If the Sterling starts to depreciate the initial fall is expected to be stopped by the 55- and 100-hour SMAs. However, once the pair manages to bypass them, the plunge might continue up until the 1.3100 mark located near the 23.6% retracement level.

 

[KristinaDC]

USD/JPY rebounds from 113.17

In line with expectations, the Yen continued to gain value against the Dollar under pressure from the slipping 55-, 100- and 200-hour SMAs. On the one hand, the currency rate continues to fluctuate within the descending channel formation, which implies further movement in the southern direction. On the other hand, the combined support level set up by the monthly PP at 113.25 and the weekly S1 at 113.22 indicates that this trading session the exchange rate is likely to spend wavering between the 113.60 and 113.30 marks.

The situation can be altered during the day amid the news coming from the APEC summit where Presidents Trump and Putin are expected to have a meeting.

 

[KristinaDC]

XAU/USD continues to climb in rising wedge formation

The yellow metal is continuing to trade against the buck at the intersection of large ascending channel and junior rising wedge formations.

Although the larger pattern managed to constrain the bullish sentiment for now, but the rising 55-, 100- and 200-hour SMAs as well as ongoing concerns over implementation of the US President Donald Trump’s tax plan suggest that such upward movement is going to continue and might actually reach the upper trend-line of another dominant descending channel near the 1,293.00 mark. However, from daily chart perspective the breakout from rising wedge formation is expected to happen earlier near the 1,288.00 level.

 

[KristinaDC]

EUR/USD starts new week near 1.1660

Despite a positive perception of ideas expressed by the US President Donald Trump at the ASEAN summit the Dollar is continuing to lose value against the Euro in a one-week long ascending channel. Although the pattern is supported by the rising 55-, 100- and 200-hour SMAs, the upcoming rebound from the 23.6% Fibonacci retracement level at 1.1679 is likely to lead to breakout to the south. This assumption is additionally backed up by the average market sentiment, which is 63% bearish. Moreover, there is a need to take into account that today there are scheduled no fundamental events that might give the pair an impulse strong enough to bypass the above resistance, which has been managing to turnaround the rate for the last two weeks.




GBP/USD spikes to 1.3230 but then drops

A release of better than expected growth rate of the UK Manufacturing Production created an upside momentum that enabled the pair to return back to the 1.3228 level. However, then fears of growing political risk in Britain and Trump’s participation in the ASEAN summit strengthen the buck and dragged the exchange rate to support area near the 1.3120 mark. On the one hand, the further road to the bottom is obstructed by the lower support line and the 23.6% Fibonacci retracement level. However, if the current bearish pressure continues this barrier may not sustain. In that case, the cable is going to test the next support zone lying around the weekly S1 at 1.3090. It should be noted that recovery of the Pound also looks unlikely, due to pressure from the falling 55-, 100- and 200-hour SMAs.

 

[KristinaDC]

USD/JPY trades in descending channel

During previous trading session the currency exchange rate expectedly approached and made a rebound from the upper-boundary of the current descending channel. As a result, now the pair is expected to continue moving to the bottom. This direction is also supported by the fact that the 55- and 100-hour SMAs are located above the current market price. Nevertheless, deprecation of the Yen might be hampered if bears fail to push the pair through the monthly PP at 113.25. In addition to that, there is a need to take into account existence of a junior ascending channel that formed as a part of the larger pattern and might also obstruct the further plunge. Finally, some volatility in the markets might also be caused by a speech that will be delivered by BOJ Governor Kuroda at the University of Zurich.




XAU/USD falls by 1.1%

The exchange rate dropped by almost 1.1% on Friday in result of 10 minutes trade that moved about 4 million ounces of the precious metal. Nevertheless, the drop was generally anticipated, as it illustrated a breakout from the rising wedge formation on daily chart. In any case, there are two main options for further movement of the pair. As majority of traders remain bullish on the pair, they might try to elevate it to the pre-fall 1,283.90 level. However, the fact road to the north is obstructed by the weekly PP and the 200-hour SMA as well as the 61.8% retracement level and the monthly PP, the pair is likely to form either a flag or pennant pattern and then resume the downfall. Such scenario would also be in line with trade pattern theory.

 

[KristinaDC]

EUR/USD trades at 1.1675

In line with expectations, the common European currency continues to advance against the Dollar in one-week long ascending channel.

However, there is a need to notice that yesterday fluctuations of the rate started to narrow down, which indicates on transformation of the current pattern into the rising wedge formation. Most likely a breakout will happen as soon as the currency rate will hit the 23.6% Fibonacci retracement level located at 1.1679. On the other hand, the rising 55-hour SMA might constrain the exchange rate from rapid falling. However, the above scenario might be altered due to the ECB President Draghi and the Fed Chair Yellen discussion at the Central Bank Communications Conference.

 

[KristinaDC]

GBP/USD anticipates British inflation release

Recovery of the Pound after rapid fall on Monday was neutralized by a combination of the 55-, 100- and 200-hour SMAs. From the southern direction the same function was exercised by support zone near the 1.3112 mark. In other words, the cable moved horizontally, anticipating the release of the British inflation data. At the moment, the rating is moving to the bottom, but if the released data beats expectations, market reaction might be large enough to bypass the above moving averages and elevate the rate to the weekly PP at 1.3160. In the opposite scenario, the sell-off of Sterling might be so active, that the currency rate will pass through the monthly S1 at 1.3072 and stop only near the 0% retracement level at 1.3039 and then resume the plunge towards the bottom edge of large descending channel.

 

[KristinaDC]

USD/JPY heads to north in ascending channel

In result of the previous trading session previously dominant descending channel ceased to exist, as the currency rate broke through its upper boundary that was additionally protected by the 100-hour SMA. As a result, now movement of the pair is guided by the four-day long ascending channel. However, that pattern might not sustain for long, as the exchange rate is approaching towards another combined resistance formed by the 200-hour SMA and the weekly PP at 113.80. Unless the buck receives a proper impulse, for instance, from the Fed Chair Yellen speech at the Central Bank Communications Conference, it is expected to fail to advance any further. On the other hand, the rapid fall might not happen as well, as the southern side is additionally backed up by a combination of the 55- and 100-hour SMAs.

 

[KristinaDC]

XAU/USD forms minor triangle pattern

Early hours of this trading session showed that yesterday’s attempt to return the price of gold back to the pre-fall 1,283.90 level failed. In particular, the exchange rate did not manage to bypass the monthly PP at 1,279.41 that was additionally backed up by the slipping 55- and 100-hour SMAs. In the meantime, the fact that it also failed to fall below the slope whose fourth confirmation point lies near the 1,275.80 level indicate on existence of a small ascending triangle formation. If this assumption is true, then the pair is expected to climb to the 1,279.00 mark. However, then a breakout most probably is going to occur in the opposite direction due to pressure from the above moving averages. But if traders give more weight to the larger rising wedge pattern, the pair is likely to break to the top.

 

[KristinaDC]

EUR/USD breaks from 3M channel amid strong German data

Due to release of much better than expected German GDP data the currency exchange rate not only left the junior rising wedge formation but also managed to break through the upper resistance line of a three-month long dominant descending channel. Generally, the pair is expected to spend some time moving horizontally and then make a turnaround, as the further path to the north is obstructed by combined resistance formed by the 50% Fibonacci retracement level, the monthly R1 and the weekly R3. This assumption is also supported on daily timeframe, as an area near the 1.1796 mark contains the 50-day SMA. However, the surge might continue if release of the American inflation and retail sales data will not justify expectations.




GBP/USD prepares for double data release


A release of latest update on the British inflation sent the cable to test support zone near the weekly S1 at 1.3090. However, by the end of the day the Pound managed to recover and returned back to the 50% Fibonacci retracement level at 1.3180.

Due to support formed by a combination of the 55-, 100- and 200-hour SMAs the pair is expected to spend first half of this trading session between the 1.3180 and 1.3125 marks. These barriers have a good chance to withhold the rate even during release of the UK earnings data.

However, the further movement of the cable is difficult to project, as it will heavily depend on release of the US inflation and retail sales data.

 

[KristinaDC]

USD/JPY heads towards 113.00

As it was expected, the currency exchange rate failed to climb above combined resistance formed by the 200-hour SMA and the weekly PP at 113.80. This rebound as well as release of positive Japan’s quarterly GDP data led to a breakout from recently formed ascending channel. As the currency rate crossed not only the 55- and 100-hour SMAs but also the monthly PP at 113.25, the pair is expected to continue heading to the bottom towards an alleged support zone near the 112.98 mark. The fact that the rate is also fluctuating in a general downtrend suggests that it should succeed to sneak below the 113.00 level. However, whether this assumption materializes will heavily depend on release of the American retail sales and inflation data.





XAU/USD returns to Friday’s 1,284.00 level

In first of yesterday’s trading session the exchange rate made left the junior ascending triangle pattern in southern direction amid strong pressure from the 55- and 200-hour SMAs. However, after making a rebound from the bottom boundary of a large ascending channel it resumed the surge and by the end of the day returned to the pre-fall 1,283.00 level. Generally, appreciation of the gold is expected to continue not only because of the abovementioned rebound but also because of additional support provided by multiple MAs as well as the monthly PP. From fundamental side, an increasing political uncertainty in the UK is likely to support demand for safe haven assets as well. However, this assumption might be easily altered if the released American data will beat experts’ expectations.

 

[KristinaDC]

EUR/USD halts surge amid US inflation data

Initially, the Euro continued to rapidly advance against the Dollar and practically reached the 1.1850 mark. However, the subsequent release of the American inflation and retail sales data that matched with analysts’ expectations returned the pair back to the 55-hour SMA near the 1.1780 level. As this moving average is additionally backed up by a combination of the 38.2% Fibonacci retracement level and the weekly R2, there is a little chance that the pair will manage to break to the bottom without proper impulse. The same applies for opposite direction, which is secured by the 50% retracement level and the monthly R1. So, this trading session the pair is likely to spend moving horizontally between these barriers unless the US manufacturing and jobs data will cause some notable price movements.