EUR/USD is currently trading at 1.1198 on the 2-hour chart, and what is capturing my attention is price is trading firmly below both the moving averages, and the descending trend line. The recent bounce was unable to take out 1.1212, keeping the larger bearish structure in place and keeping control with sellers.
The first area of support I am looking at is 1.1161. If price were to break 1.1161, 1.1115 would be the next area of support, followed by 1.1063. The first area of resistance is located at 1.1212, followed by 1.1272 and then 1.1334 if buyers are able to initiate a larger move to the upside.
RSI is still below the midline, indicating that the larger time frame trend remains bearish. I would agree with the bearish bias as long as 1.1212 and the descending trend line continue to provide resistance. A break above 1.1272 would be bullish, and a break below 1.1161 would confirm 1.1115 as the next area of support.
EURJPY ended its bullish corrective rebound by posting another negative close below the additional barrier at 179.45, allowing the price to form new bearish waves and achieve some of the previously suggested bearish targets by touching 176.50.
The price currently has little choice but to resume its bearish attack, with the next bearish target at 175.75 expected to be reached soon. With sufficient bearish momentum, the price may also succeed in pressuring the support at 174.95.
The expected trading range for today is between 175.75 and 178.00
Gold continued to decline in recent intraday trading, affected by its movement along a main short-term bearish trend line, while the negative pressure resulting from trading below the EMA50 remains in place. The EMA50 is acting as dynamic resistance, intensifying the bearish pressure around the price, particularly as negative signals continue to emerge from the relative strength indicators.
The Pound US Dollar (GBP/USD) exchange rate edged lower in mid-week trading, with a cautious market mood encouraging investors towards traditional safe-haven currencies such as the US Dollar.
GBP/USD was trading at approximately $1.3227 at the time of writing, a decline of around 0.4% from Wednesday’s opening levels.
Fresh demand for the US Dollar (USD) emerged on Wednesday as deteriorating risk appetite strengthened the appeal of the safe-haven currency.
A renewed jump in oil prices added to the more defensive tone, with Brent crude moving back above $100 a barrel.
Concerns over global energy supplies intensified amid escalating tensions in the Middle East, while a storm also threatened US oil production.
Market participants were also adopting a cautious stance ahead of the release of minutes from the Federal Reserve’s latest policy meeting.
Investors will scrutinise the minutes for clues about the debate surrounding the future direction of US interest rates, particularly after several policymakers struck a more cautious tone in response to recent softer inflation and employment figures.
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Signs that officials remain worried about stubborn price pressures could bolster expectations of additional monetary tightening, potentially giving the US Dollar another lift.
Sterling struggled for momentum on Wednesday, with a lack of significant UK economic releases leaving the currency particularly sensitive to developments in the domestic bond market.
Gilt yields continued to edge higher, creating an additional headwind for the Pound.
Rising borrowing costs have once again highlighted concerns surrounding the UK’s stretched public finances, with the prospect of further increases potentially eating into Chancellor John Healey’s limited fiscal headroom ahead of the Autumn Budget.
Expectations of a November interest rate increase from the Bank of England (BoE), however, continued to provide some support for Sterling and helped prevent a sharper decline.
Near-Term GBP/USD Forecast: BoE Speakers and US Jobless Claims in Focus
Attention now turns to a busy run of BoE speeches, which could provide fresh direction for the Pound US Dollar exchange rate during the latter part of the week.
MPC members Megan Greene and Huw Pill are both scheduled to speak, having joined the minority that voted for a 25-basis-point rate increase at last month’s meeting.
Governor Andrew Bailey is also due to address markets.
A more hawkish message from Bailey, particularly if he suggests that persistent inflationary pressures could justify another rate increase in November, may offer Sterling a boost.
On the US side, the latest initial jobless claims figures could influence USD trading on Thursday.
A larger-than-expected increase in unemployment claims could weigh on the Dollar by raising concerns over the health of the US labour market.
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Spot gold is trading lower Wednesday after failing to extend Tuesday’s bounce from $4,103.52. The main trend is down according to the daily swing chart.
A trade through $4,399.67 will change the main trend to up. A move through $4,103.52 will reaffirm the downtrend.
The first resistance is the long-term 61.8% level at $4,230.51. Overtaking this level could extend the recovery into the 50% level at $4,319.61, followed closely by the 50-day moving average at $4,331.64.
On the downside, a break through $4,103.52 would expose the main bottoms at $3,996.06, $3,959.80 and $3,942.10.
What to Watch
The Fed minutes and the 10-year auction are what gold has to get through Wednesday. Both hit with the dollar firm again and the long end back near its highs.
I’m watching the 10-year more than any single line in the minutes. The auction shows what it costs to get somebody to own long-dated paper right now. Gold has been trading off that number all week. The minutes are the other half. Traders already know the committee hiked in September. What they don’t know is how many officials saw the jump in long-term yields as doing some of the Fed’s work for it. That’s the part that decides how December stays priced. The dollar is the third piece. It’s back within reach of Monday’s high with gold leaning on its own low.
Spot gold topped at $4,170.00 early and slid back toward Tuesday’s $4,103.52 low by mid-morning in London. The bias is to the downside while the main trend is down and spot gold remains below the 61.8% level at $4,230.51 and the 50-day moving average.
USD/JPY remains stuck near the resistance level at 158.00 – 158.50 despite rising Treasury yields. The yield of 10-year Treasuries settled near the 5.32% level, while the yield of 30-year Treasuries continued its attempts to settle above 5.70%. Interestingly, recent hawkish comments from BoJ Governor Ueda did not provide material support to the Japanese yen.
From the technical point of view, USD/JPY continues its attempts to settle above the 158.50 level. If USD/JPY settles above 158.50, it will head towards the next resistance, which is located in the 160.00 – 160.50.
Following the reclaim of the 200-day moving average, last week’s high was exceeded as noted above, and that was followed by a rise above the upper boundary of a rising trend channel. That upper boundary area may see resistance and stall the ascent but if support is confirmed near the 200-day moving average and followed by strength, a continuation higher to challenge last month’s peak of $3.317 could occur.
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EURJPY remains affected by conflicting signals from the main indicators, forming some bullish corrective waves and stabilizing near 178.00. However, this will not affect the main bearish scenario, which remains supported by the formation of 179.45 as an additional resistance level.
We expect the pair to continue mixed trading for now until it gathers the required bearish momentum to resume its negative attempts and reach the bearish targets, starting at 176.80 and 176.00. However, breaking above the additional resistance would give the price room to extend its corrective gains, with the next targets at 179.90 and the key resistance at 180.80.
The expected trading range for today is between 177.00 and 179.40
Platinum price remains under negative pressure, with the price currently attempting to stabilize below the support level at $1705.00, increasing the chances of activating the previously suggested bearish scenario. We reiterate the importance of a daily close below the current support, which would strengthen the chances of targeting $1660.00 and $1605.00 in succession in the near term.
However, a return to stability above $1705.00 would force the price into mixed trading, with room for some gains as it advances toward the key resistance level at $1840.00.
The expected trading range for today is between $1660.00 and $1740.00
EUR/USD is near 1.1230 on the daily chart and has recently fallen from the 1.1352 area. I find it important that price is below both the moving averages and the rising trendline, and the latest leg lower has pushed the pair into the lower Fibonacci extension. From a larger time frame perspective, the structure is very bearish.
Support comes in at 1.1225. A downside break from that area would open up 1.1131 and then 1.0993. 1.1352 remains the first major barrier on the upside, with 1.1489 extending higher and coming into focus if we see a more decisive recovery.
RSI is extremely oversold and confirms the strength of the lower moves, however it also increases the probability of a minor bounce back higher. I am looking for opportunities to sell more aggressively should we remain below 1.1352 and within the existing descending trend. If 1.1489 comes into play, I will look to reverse my perspective. A break below 1.1225 would put 1.1131 in focus.
