Daily Technical Analysis for Majors by Dukascopy

[KristinaDC]

Gold rebound results in jump

On Tuesday morning initially it looked like the yellow metal has broken the dominant ascending channel. However, the situation is quite different. After examining the chart more one can discover that the ascending channel needs to be adjusted. Meanwhile, the bullish long term outlook still persists.

In regards to the short term outlook, the bullion’s price had approached the support of the proven 61.80% Fibonacci retracement level at the 1,279.05 level, where it seemed to have made a rebound.

Although, the metal still faced the 55 and 100-hour SMAs, which needed to be passed until the price surges back higher.

 

[KristinaDC]

EUR/USD fails to climb above 100-hour SMA

Previous trading session was marked by attempt to elevate the pair above the 1.1780 level amid concerns over President Trump’s tax reform. However, the surge was successfully neutralized by the 100-hour SMA that was additionally backed up by the weekly PP and the 200-hour SMA. As a result, the pair slipped back to the 55-hour SMA. Until release of data on the US Core Durable Goods Orders the pair is likely to fluctuate near the 1.1760 mark. Depending on result, the exchange rate might either jump and clash with the above combined resistance or fall and hit the bottom trend-line of junior ascending channel. Even if this pattern does not sustain, a deep plunge will be still unlikely as an area between 1.1725 and 1.1722 represents notable support level.

 

[KristinaDC]

GBP/USD awaits GDP release in symmetrical triangle

Due to growing fears about hard Brexit possibility the Sterling depreciated against the Dollar by 104 basis points. From technical perspective this plunge matched with a rebound from the upper trend-line of a dominant descending channel towards the bottom edge of a smaller ascending channel. Until release of data on the UK quarterly GDP the cable is likely to consolidate near the 38.2% Fibonacci retracement level located at the 1.3145 mark. In case of positive news the pair might surge straight to the 1.3170 level that will be secured by the 100- and 55-hour SMA. In the opposite scenario, there is a high chance that bears will succeed to push the pair from the symmetrical triangle pattern. In that case the Pound most probably is going to depreciate against the Dollar in the foreseeable future.

 

[KristinaDC]

USD/JPY fluctuates in ascending triangle

A number of failed attempts to break through the 114.00 resistance level as well as inability of the rate to slip below the rising 55- and 100-hour SMAs confirmed an assumption that the pair is fluctuating in an ascending triangle pattern. A release of information on the US Core Durable Goods Orders later this day provides a good opportunity to make a breakout from it. At the moment, the northern side looks more reliably secured due to additional barrier set up by the weekly R1 at 113.19. The southern side, in contrast, is protected only by moving averages, which are located quite far away from each other. In addition to that, there is a need to take into account that the average market sentiment is 61% bearish.

 

[KristinaDC]

XAU/USD trades in falling wedge

The exchange rate has finally made a breakout from the medium-term ascending channel. The plunge was caused by a rebound from the upper-trend line of the junior descending channel that was additionally backed up by the 100-hour SMA near 1,281.00. In the meantime, narrowing fluctuations of the rate indicate that the above channel is gradually transforming into the falling wedge formation. If this is the case, then a combined support formed by the lower line of the pattern in conjunction with the weekly S1 at 1,269.58 is expected to neutralize the fall after release of information on the US purchase orders. There are similar expectations for the opposite direction, which should be reliably secured by the 55- and 100-hour SMAs that are slipping along the resistance line of the wedge.

 

[KristinaDC]

EUR/USD anticipates ECB meeting

Despite a release of better than expected US purchase orders data the currency rate did not manage to bypass the 55-hour SMA and soared in the opposite direction. The main drivers that pushed and are continuing to push the pair to the top are expectations on the upcoming ECB meeting. On the one hand, the currency rate faces two notable resistance levels near 1.1835 and 1.1850. The first one represents an upper trend-line of an alleged descending triangle, while the second one represents an upper boundary of a large descending channel. However, if the central bankers’ meeting produces a decision about cutback of the quantitative easing program the Euro might easily break through these barriers and reach the 1.1900 mark.

 

[KristinaDC]

GBP/USD inches higher amid GDP report

According to the Office for National Statistics, the temps of growth of British economy spiked to 0.4% in the third quarter. This news gave the cable an upside momentum, which it used to break through the upper trend-line of a dominant descending channel.

As there are no significant UK or US data releases planned for today, bulls might use this lull to elevate the pair to the weekly R1 at 1.3306. In support of this assumption, there is need to take into account that some of the Pound traders are simultaneously following the ECB meeting and are trying to push the Sterling in parallel with the Euro. On the other hand, bears might use an area between the 1.3285 and 1.3290 marks to either halt or even turnaround the pair.

 

[KristinaDC]

USD/JPY fails to surge above 114.20

Although the currency exchange rate was fluctuating in an ascending triangle, releases of better than expected American data forced the pair to stop testing the weekly R1 at 114.19 and make a breakout in the southern direction. As the rate has already passed through the 55- and 100-hour SMAs, it is expected to continue the plunge. However, there are two support barriers on the way that might turnaround the pair one more time. The first one is located between the 113.25 and 113.21 marks, while the second one represents the rising 200-hour SMA. Daily chart suggests that the pair will not manage to slip below the 113.00 level, as that that area represent location of the lower support line of the dominant rising wedge pattern.

 

[KristinaDC]

XAU/USD breaks from falling wedge

In result of the previous trading session, the exchange rate made a breakout from the falling wedge formation. The surge was not sharp, as the pair was slowed down by a combination of the 55- and 100-hour SMAs as well as the 61.8% Fibonacci retracement level. In first half of the day the pair is expected to test the 200-hour SMA near 1,284.77. The strength of this moving average most probably will force the pair to temporarily retreat. In larger perspective the yellow metal might notably recover against the buck, as the above breakout simultaneously signified a rebound from the bottom trend-line a one-month long ascending channel. In that case, there the pair is unlikely to reach the support line of a long term dominant ascending channel in the foreseeable future.

 

[KristinaDC]

EUR/USD sinks amid ECB meeting

The common European currency collapsed against the Dollar after the ECB President Draghi cut the size of asset purchases but prolonged the quantitative easing program for nine months. From technical point of view, this event signified a breakout from symmetrical triangle pattern. In other words, the pair bounced off from a combined resistance formed by the 55-day SMA and the upper trend-line of a dominant descending channel. During today’s trading session bulls are likely to try to recover the Euro. However, these attempts are expected to fail, as the pair will need to cross the monthly S1 at 1.1658 and the weekly S2 at 1.1662. On chart this scenario even more unlikely, as the northern side there is additionally secured by the 100-day SMA.

 

[KristinaDC]

GBP/USD returns to Wednesday minimum

Following a report that the key Brexit draft law will be debated in parliament in the middle of November, the Pound dropped against the Dollar. This news as well as prolongation of the quantitative easing program announced by the Mario Draghi gave an excellent opportunity to return the cable to the 1.3130 level, from which it started a massive surge this Wednesday. Despite such high volatility the lower trend-line of a dominant ascending channel is expected to block any further attempts of the rate to sneak to the bottom at least until release of the US Advance GDP later this day. However, another round of rapid surge is not expected either, as path to the north is reliably secured by a combination of the 55-, 100- and 200-hour SMAs together with the weekly PP at 1.3197.

 

[KristinaDC]

USD/JPY once again tries to break above weekly R1

In result of the weaker than expected Japan’s national CPI data release as well as the ECB announcement, the pair found support at the 113.34 level and then resumed the surge. Similarly to Wednesday, it failed to break above the weekly R1, which is located at the 114.19 level. In principle, a release of better than expected information on the US GDP growth later this day might provide a necessary impulse for successful break through the above resistance level. In that case, bulls will get a chance to elevate the rate to the monthly R1 at 114.75. Otherwise the currency pair is expected to retreat back to the 113.80 level, which represents location of the 55- and 100-hour SMAs, or even lower.

 

[KristinaDC]

XAU/USD slips below weekly S1

After making a breakout from the falling wedge formation, the yellow metal was expected to continue the surge at least until the clash with 200-hour SMA. However, a plunge in Euro amid the ECB meeting led to downfall of the exchange rate. As a result, it has finally slipped below the weekly S1 located at the 1,269.58 mark. Such outcome simultaneously signified dissolution of the junior ascending channel and increased probability of a contact with combined support formed by the 200-day SMA and the bottom trend-line of the dominant ascending channel. In fact, on hourly chart at the moment there are no technical barriers between the above barriers and the exchange rate. However, a release of the US Advance GDP might alter this scenario and restore the value of gold.

 

[KristinaDC]

EUR/USD starts new week near 1.1614

In result of the previous trading session, the currency exchange rate slipped through the updated 23.6% Fibonacci retracement level at 1.1679 and, in essence, made a rebound from the bottom trend-line of a dominant descending channel. Due to absence of any fundamental data releases, bulls are likely to try to return the rate back to 1.1643, at minimum. However, the further recovery of the Euro seems unlikely because of a combined resistance formed by the monthly S1 at 1.1658, the weekly PP at 1.1674 and the falling 55-hour SMA. The southern side, in contrast, remains barrier-free. In addition to that, there is couple of fundamental factors that incite further appreciation of the Dollar, such as Donald Trump’s tax reform and possible nomination of John Taylor, as the Fed chair.

 

[KristinaDC]

GBP/USD approaches weekly PP at 1.3160

Friday’s trading session was significant for two reasons. On the one hand, the cable managed to break through the lower trend-line of the senior ascending channel. On the other hand, it failed to slip below the 1.3090 mark, which correlates with location of the bottom boundary of an alleged larger, dominant ascending channel.

Such outcome allows assuming that this pattern will be strong enough to block another attempt of the pair to fall below the 1.3100 mark, following the general strengthening of the Dollar. At the same time, rapid recovery of the Pounds seems unlikely as well due to presence of a combined resistance set up by the weekly PP, the 55-, 100- and 200-hour SMAs.

 

[KristinaDC]

USD/JPY approaches 113.80

New trading week the currency rate stared in a limbo between the 200-hour SMA from the bottom and a combination of the weekly PP, the 55- and 100-hour SMAs from the top. Such neutral movement reflects anticipation of the Bank of Japan Policy Rate announcement. But since there is high probability that the central bank will left the monetary policy unchanged, the pair is not expected to act unpredictably. Such assumption is partially supported by presence of two extremums, which have already forced the rate to make a rebound more than once. The first is located near the 114.30 mark, while the other at the 113.34 level. A breakout through one of these barriers is likely to follow after the FOMC Statement, which will be delivered on Wednesday.

 

[KristinaDC]

XAU/USD goes up amid Catalan crisis

The pair had all means to reach the bottom trend-line of a dominant ascending channel. A release of information about the US GDP growth was projected to give an additional stimulus. However, a declaration of independence by the Catalan parliament and subsequent sack of the regional government by Spanish PM spiked demand for gold. As a result, the new trading session the pair started at the updated weekly PP at 1,274.04. As this barrier is additionally secured by the 55- and 100-hour SMA, the exchange rate is expected to resume movement to the south, trying to reach the weekly S1 at 1,264.23. Fundamental background, generally, supports strengthening of the Dollar. But in the meantime, North Korean and Catalan geopolitical risks might provoke short-term recoveries of the yellow metal.

 

[KristinaDC]

EUR/USD climbs to monthly S1 at 1.1658

In line with expectations, the Euro continued to successfully recover against the Dollar until it met the first line of defence set up by the monthly S1 at 1.1658.

Nevertheless, a pressure from the 55-hour SMA is likely to provoke the pair to make another attempt to break to the top. On the one hand, a combined resistance formed by the weekly PP at 1.1674 and the 100-day SMA represent too strong barrier to be so easily crossed. On the other hand, the exchange rate two days ago made a rebound from the bottom edge of a senior descending channel. From this perspective, the pair is expected to climb upstairs for some while. An additional impulse might be provided after today’s release of the Euro Zone’s inflation data.

 

[KristinaDC]

GBP/USD returns to 1.32 level

The first arrests made in result of Robert Mueller’s investigation as well as anticipation of the upcoming interest rate hike helped the pair to prematurely break through a massive resistance set up by three moving averages plus the weekly PP at 1.3160. In general, bulls are expected to try to push the cable to the last Thursday’s pre-fall level at 1.3270. However, today this attempt is likely to be blocked by another resistance level formed by the weekly R1 at 1.3250 and the upper trend-line of an alleged two-month long descending channel. On the other hand, there is a need take into account effect from release of various American fundamental data later this day, which might either provide an additional impulse for a breakout to the top or drag the pair back to the 100-hour SMA.

 

[KristinaDC]

USD/JPY trades near 113.10 after BOJ meeting


On Tuesday, the Bank of Japan left the interest rate, target inflation and core inflation forecast unchanged. In other words, they still amount to -0.1%, 2% and 1.8%. However, since this decision was widely expected, the Yen did not gain much value against Dollar. In fact, it stuck at the weekly S1 at 113.13. However, this correction is likely to last only until release of the American data. Depending on the actual figures the pair might either surge to the combined resistance set up by the 200-, 100- and 55-hour SMAs near 113.60 or slip further to the weekly S2 located at the 112.58 level. From daily perspective, the pair is expected to start gradually moving in the southern direction, as previous two days marked a long awaited breakout from the rising wedge formation.