USD/JPY Price Forecast – US Dollar Rallies Towards 50 Day EMA

The US dollar has rallied a bit during the trading session on Tuesday, reaching towards the 50 day EMA. The 50 day EMA is an indicator that a lot of people have been paying attention to for the last several months, as it is dynamic resistance. The fact that the candlestick broke above the ¥105.50 level suggests that perhaps there is more of a “risk on” feel to the market during the day, but we have seen this happen multiple times and therefore it is only a matter of time before we probably rollover again. After all, the US dollar is still in the crosshairs of potential stimulus, so that in and of itself could cause the greenback to pull back a bit.

USD/JPY Video 21.10.20

Ultimately, this is a pair that seems like it is trying to build up the necessary momentum to finally break down below the ¥105 level. Breaking down below there opens up the possibility of a move down to the ¥104 level, followed by a break down to the ¥102 level. With the bonds in Japan offering more yield than in the United States, that is another reason we have been seeing this market drift lower.

That being said, there are a lot of questions out there as to whether or not we are in a “risk on” or possible “risk off” type of environment, so that will continue to cause issues. That being said, I have found the easiest way to trade this market lately has been to simply short signs of exhaustion on smaller time frames for smaller positions.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Price Forecast – British Pound Pulls Back Again

The British pound initially rally during the trading session on Tuesday, reaching towards the 1.30 level which of course is a very significant large, round, psychologically significant figure. This large number has caused quite a bit of resistance so at this point it is not a huge surprise to see that we have pulled back a bit. Between the 1.30 and the 1.31 levels, there seems to be a significant amount of selling pressure. To the downside, the market continues to look at the 1.28 level as potential support, as well as the 1.2750 level. Just below there, we have the 200 day EMA which of course is very important to pay attention to.

GBP/USD Video 21.10.20

To the upside, if we were to somehow break above the 1.31 handle, then the British pound will more than likely go looking towards 1.33 level followed by the 1.34 handle. That being said, it would take some type of good news when it comes to Brexit or some other such event. Another possible driver of that move could be the stimulus package in the United States actually being shoved through, but at this point it is still difficult to understand exactly what it is that Congress can do between now and the election.

All things being equal, when you look at this chart it does appear that we are running into a significant amount of resistance that we could very easily find this market breaking back down. Regardless of what you choose or see, you need to keep your position relatively small.

For a look at all of today’s economic events, check out our economic calendar.

GBP/JPY Price Forecast – British Pound Continues to Go Sideways

The British pound initially rallied a bit during the trading session on Tuesday, breaking above the 50 and the 200 day EMA indicators on the chart. Both of those are flat though, so it tells you that we are simply going sideways. Ultimately, this is a market that I think continues to see a lot of questions when it comes to directionality, and at this point I am essentially looking at the market as a hostage to the Brexit nonsense that will continue to cause issues.

GBP/JPY Video 21.10.20

The market certainly sees a lot of support underneath at the ¥135 level, which has been important for a long-term standpoint as well, but at the same time we have seen a lot of resistance at the ¥138 level. As we are essentially in the middle of that range, it is likely that the market is simply going to chop back and forth. Ultimately, I look for this market to reach the outer levels of the range in order to play against those areas. Ultimately, this is going to come down to the latest headline coming out of Brexit, so it is almost impossible to trade this market with any type of real confidence.

Furthermore, it is also a currency pair that is highly sensitive to risk appetite, and if risk appetite falls apart that will work against the value of this pair as well, as people start looking towards the Japanese yen for some type of safety. Ultimately, I think the one thing that you probably need to take away is that you need to keep your position size relatively small.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Price Forecast – Euro Continues to Reach Towards Trendline

The Euro has rallied significantly during the trading session on Tuesday, reaching just above the 1.18 level by the time New York got on board. The question now probably focuses on whether or not there is going to be stimulus coming out of the US, because Nancy Pelosi suggested that Tuesday was the “deadline” to get anything done between now and the election. My suspicion is they will find a way to cause some type of issue, as politicians in the United States continue to become more childless each day. However, the market seem to cling on to some kind of hope so that is something worth paying attention to.

EUR/USD Video 21.10.20

There is the possibility that we get a “sell the news” type of event when it comes to stimulus, meaning that the markets may do exactly opposite of what you expect. After all, we have been pricing in the idea of stimulus for so long that perhaps people will start to take profit. While that is not my base case scenario, it is something worth paying attention to. To the downside, I believe that the 1.17 level will probably continue to be crucial, and therefore if we were to break down below there it opens up the possibility of a move down to the 1.16 handle.

To the upside, I see the 1.1850 level as offering resistance, just as the 1.19 level is above there, and of course the 1.20 level which has been a massive amount of noise. If we can break above the 1.12 level, then the Euro can continue a longer-term move to the upside, but we are clearly quite a way from having that happen right now.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Price Forecast – Australian Dollar Continues to Show Weakness

The Australian dollar has broken down a bit during the trading session on Tuesday, to break down towards the 0.70 level. If we can break down below the 0.70 level, the market is likely to go looking towards the 200 day EMA. Breaking down below there allows the market to go down to the 0.68 handle. That of course is a very significant round figure and could kick off a larger move to the downside. Ultimately, a lot of this is going to come down to a lack of stimulus in the United States but we have also recently seen the Reserve Bank of Australia suggest that interest rate cuts are in fact coming, so that will weigh upon the Australian dollar as well.

AUD/USD Video 21.10.20

Ultimately, the market is likely to see a lot of selling on rallies, unless of course we were to somehow break above the 0.73 level. If we break above there, then it is likely that the overall uptrend should continue to go higher, perhaps reaching towards the 0.75 level. However, that is not my default position right now, so at this point it is likely that we will continue to see downward pressure. I do not know that it necessarily means that we are going to break down significantly, but it seems very likely that we are going to be negative in general. Ultimately, this is a market that will continue to be noisy and of course you have to keep in mind that the risk appetite is going to be a moving target. That being said, the more volatility that we get in other assets, the less likely this pair is to go higher.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Mid-Session Technical Analysis for October 20, 2020

The Euro is trading higher against the U.S. Dollar on Tuesday ahead of a deadline for a new fiscal stimulus deal from Washington.

Optimism is being fueled as House Speaker Nancy Pelosi and Treasury Steven Mnuchin “continued to narrow their differences” in a Monday afternoon phone call to discuss another stimulus package, according to Pelosi spokesman Drew Hammill.

At 12:38 GMT, the EUR/USD is trading 1.1807, up 0.0036 or +0.30%.

Despite the early strength, fading hopes for a U.S. coronavirus aid package and weaker demand for risky assets worldwide, with rising coronavirus infections in Europe are likely to continue to limit gains in the single currency.

Daily EUR/USD

 Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1831 changes the main trend to up. A move through 1.1688 will signal a resumption of the downtrend.

The minor range is 1.1831 to 1.1688. Its 50% level at 1.1760 is new support.

The main retracement zone support is the 50% level at 1.1691.

The short-term range is 1.2011 to 1.1612. Its retracement zone at 1.1811 to 1.1859 is potential resistance. The lower or 50% level of this zone at 1.1811 is currently being tested.

Daily Swing Chart Technical Analysis

Based on the early price action, the direction of the EUR/USD on Tuesday is likely to be determined by trader reaction to the short-term 50% level at 1.1811.

Bullish Scenario

A sustained move over 1.1811 will indicate the presence of buyers. This could create the upside momentum needed to take out the 1.1831 main top, followed by the Fibonacci level at 1.1859.

Bearish Scenario

A sustained move under 1.1811 will signal the presence of sellers. This could trigger an acceleration into the minor pivot at 1.1760.

For a look at all of today’s economic events, check out our economic calendar.

Dollar Under Pressure but EUR/AUD Stands Out

Indices and American Dollar collapsed yesterday. Tuesday brings us a reversal attempt on stocks but Dollar remains ultra-bearish. We are not surprised with that as we were highlighting this possibility in our video from yesterday. As always, welcome to Trading Sniper, where we have three best trading setups on the market.

First one is the Dollar Index, which is in a downfall after creating the flag and the head and shoulders pattern. Both formations ended with broken supports, which in both cases activates a legitimate sell signal. We do not see much of a hope for buyers but comeback above the neckline could be good for a start. As long as we stay below, the sentiment is negative.

Slide on Dollar Index, usually means rise on EURUSD. It is not different this time. The price came back above two major horizontal resistances and then managed to break the long-term down trendline. That breakout gives us a buy signal and a lot of optimism.

EURUSD may look nice but crème de la crème of today’s video is EURAUD. A long time ago, I spotted a nice sideways trend and was waiting for a breakout ever since, to the upside to be accurate. The breakout happened yesterday and ended 4 months of a boring sideways trend. According to Price Action, that is a strong, long-term buy signal, the one that should come as a reward for patient traders. Lets see how this one will work out.

For a look at all of today’s economic events, check out our economic calendar.

Further Price Pressure as the USDX Is About to Rally

Gold, mining stocks, and the USD Index have not been doing much recently. However, yesterday, this “inactivity” took quite a decisive shape, and unfortunately, things are not looking good for gold.

As you are all aware, gold tends to move conversely to the USD Index. Therefore, it’s useful to focus on the latter for signs that would influence the former. So, what does the current USDX outlook look like?

Well, it looks like the USDX is about to rally. It broke above its medium-term resistance line and verified this breakout. This verification took the form of a decline based on a more recent short-term breakout, which seems to have ended.

From a medium-term point of view, since the market had to correct before moving higher again, it’s no wonder that it had to do the same from a short-term perspective as well.

Based on the chart above, the outlook for the USD Index is bullish.

But, before we move to gold, please pay attention to the shape of the last candlestick. The USDX moved relatively lower, almost touching the declining support line.

Considering the above, one might have expected to see a visible daily gain in gold – maybe with a small correction, but again, with a substantial gain in terms of daily closing prices. So, did we witness something like that?

Not really.

Gold was marginally up, which is a notable bearish indication. The bearish confirmation comes from the fact that gold tried and failed to break above the declining resistance line.

Above the resistance line, gold took only a small comeback from the USD Index that made gold invalidate its intraday breakout. It is a clear sign of weakness.

And you know what precious metals sector sign of weakness is even more visible? It’s yesterday’s action in gold and silver mining stocks .

Namely, miners have declined adamantly– much more visibly than gold. This type of underperformance is what precedes the decline. Or, more precisely, it is often the very initial part of a more significant decline.

That is a perfect cherry on the bearish analytical cake that we’ve “baked” in our previous analyses. Over a week ago , we wrote that the situation was reminiscent of the earlier cases, marked with blue ellipses. Namely, the GDX ETF moved only a tad higher, which was the final top for at least some time. We argued that the strong daily rally that started with a bullish price gap was not so bullish after all. Indeed, over a week later, once again, miners are visibly lower.

Of course, based i.a. in the USDX situation, most probably, this is not the end of the miners’ decline, but rather, it is just the beginning. The situation relative to the 50-day moving average (marked with blue) confirms it. After all, back in March, miners moved slightly above their 50-day moving average only to plunge shortly after that, and the current situation is the only similar case to the above. There were no other cases when the miners broke below this MA and then moved back up slightly above it, declining once again afterward.

And due to the above, if the situation wasn’t bearish enough, the Stochastic indicator based on the GDX ETF has just flashed a clear sell signal.

All in all, currently, the outlook for the precious metals market remains bearish.

As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.

For a look at all of today’s economic events, check out our economic calendar.

Przemyslaw Radomski, CFA
Editor-in-chief, Gold & Silver Fund Manager
Sunshine Profits: Analysis. Care. Profits.

* * * * *

All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski’s, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

AUD/USD and NZD/USD Fundamental Daily Forecast – Aussie Hits Three-Week Low on QE Expectations

The Australian and New Zealand Dollars are trading sharply lower on Tuesday, putting them in a position to change their respective trends to down on the daily chart for the first time in nearly two-weeks.

Both currencies are being pressured by increasing expectations of monetary easing with the Australian central bank likely to take action at next month’s meeting and the New Zealand central bank likely to make their move early next year.

At 08:15 GMT, the AUD/USD is trading .7047, down 0.0022 or -0.32% and the NZD/USD is at .6575, down 0.0033 or -0.50%.

US Dollar Supported as Stimulus Deal Hopes Fade

Also weighing on the Aussie and the Kiwi was as stronger U.S. Dollar, which rose as fading hopes for a U.S. coronavirus aid package dealt a blow to risky assets worldwide.

While traders remain hopeful talks between U.S. House Speaker Pelosi and Treasury Secretary Mnuchin will result in a deal before the November 3 presidential election, any agreement will have to pass the Republican-controlled Senate where opposition to a bigger stimulus bill remains stubborn.

RBA Minutes Weigh on Aussie as QE Looms Large

The Reserve Bank of Australia (RBA) discussed the possibility of further monetary easing at its October board meeting, including cutting the cash rate towards zero and buying longer-dated government bonds, minutes of its most recent meeting showed on Tuesday.

RBA board members noted larger balance sheet expansions by other central banks had led to lower sovereign yields in most other rich nations, minutes of the October 6 meeting showed.

Board members also discussed implications for the exchange rate, providing the clearest sign yet the RBA will likely soon cut rates further and expand its massive bond buying campaign, to lower both borrowing costs and the local dollar.

Short-Term Forecast

The RBA has held its cash rate at a record low 0.25% since can emergency 50 basis points (bps) cut in mid-March. However, economists widely predict the RBA will trim the rate at its November 3 policy meeting by 15 bps to 0.1%. This move, coupled with the buying of bonds further out the yield curve should be enough to keep the pressure on the Aussie Dollar.

Buying long-dated bonds is one way that central bank policymakers would reduce funding costs.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Daily Forecast – Australian Dollar Remains Under Pressure

AUD/USD Video 20.10.20.

U.S. Dollar Continues To Gain Ground Against Australian Dollar

AUD/USD remains under pressure as the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to get back above the 20 EMA at 93.55. If this attempt is successful, the U.S. Dollar Index will gain additional upside momentum and head towards the next resistance level at the 50 EMA at 93.75. This scenario will be bearish for AUD/USD.

Today, AUD/USD traders will focus on the economic data from U.S. Building Permits are projected to increase by 1.8% month-over-month in September while Housing Starts are expected to grow by 2.8%.

In addition to economic news, the market will pay attention to the U.S. coronavirus aid package negotiations. At this point, it looks like Republicans and Democrats will not be able to reach any deal before the November election. However, a last-minute deal is also possible.

Technical Analysis

aud usd october 20 2020

AUD/USD has managed to settle below 0.7075 and gained additional downside momentum. However, it received support at 0.7030 and is currently trading in the range between the support at 0.7030 and the resistance at 0.7075.

If AUD/USD manages to settle below the support level at 0.7030, it will continue its downside move and head towards September lows at 0.7005. A move below the support at 0.7005 will open the way to the test of the next support level at 0.6975.

On the upside, the nearest resistance level for AUD/USD is located at the previous support level at 0.7075. AUD/USD needs to settle above this level to have a chance to develop upside momentum.

If AUD/USD moves above the resistance at 0.7075, it will gain additional upside momentum and head towards the next resistance at 0.7100.

A successful test of the resistance at 0.7100 will open the way to the next resistance at 0.7130. The 20 EMA is located in the nearby, so this resistance level is set to be a significant obstacle on the way up for AUD/USD.

If AUD/USD manages to settle above the resistance at 0.7130, it will move towards the next resistance level at 0.7150.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – Euro Tries To Continue Its Upside Move

EUR/USD Video 20.10.20.

U.S. Dollar Remains Under Pressure Against Euro

EUR/USD has managed to settle above the resistance at 1.1750 and is trying to get above the next resistance at 1.1780 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index has managed to settle below the 20 EMA at 93.55 on hopes for a new U.S. stimulus package. While the stock market has abandoned such hopes and finished yesterday’s trading session deep in the red zone, currency traders are more optimistic so the U.S. dollar is not able to develop upside momentum.

The nearest support level for the U.S. Dollar Index has emerged near 93.25. In case the U.S. Dollar Index manages to settle below this level, EUR/USD will have good chances to gain additional upside momentum and settle above 1.1800.

Just like the British pound, EUR/USD will remain sensitive to Brexit news. At this point, EU and Britain blame each other for the lack of progress in negotiations. The market believes that both sides are bluffing and that they will ultimately reach a compromise deal.

If this does not happen, EUR/USD may find itself under material pressure as a no-deal Brexit will present an additional problem for the European economy which is currently suffering from the second wave of the virus.

Technical Analysis

eur usd october 20 2020

EUR/USD continues its attempts to settle above the nearest resistance level at 1.1780. In case EUR/USD manages to get above this level, it will gain additional upside momentum and head towards the next resistance at October highs at 1.1830.

A move above 1.1830 will signal that EUR/USD is ready to move higher. In this case, EUR/USD will have to deal with the resistance at 1.1870 on the way to the major resistance level at 1.1910.

On the support side, the previous resistance at 1.1750 will likely serve as the first support level for EUR/USD. If EUR/USD settles below this level, it will decline towards the next support at 1.1720. A move below the support at 1.1720 will open the way to the test of the next support level at 1.1695.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Bulls Fighting to Reach 1.1925 Target Zone

The EUR/USD made a strong bullish bounce at the 61.8% Fibonacci support zone. This could indicate a larger bullish ABC pattern (purple).

This article will indicate the key zone for the confirmation of the breakout. We also review the targets and invalidation spots.

Price Charts and Technical Analysis

EUR/USD 4 hour chart

The EUR/USD is testing a key resistance trend line (orange). A bullish breakout above the resistance trend line (orange) and Fractal (red box) confirms the uptrend continuation (green arrows).

In this case, price action is expected to reach the Wizz and Fibonacci targets. The main target could be as high as 1.1925-50 zone where the larger wave C (purple) could be completed.

A bearish breakout (orange arrows) is expected to be just a pullback within wave B (purple). A bullish reversal (blue arrows) could confirm the current wave pattern. Only a break below the bottom invalidates it (red x).

On the 1 hour chart, price action is using the 21 ema zone as a support for a bullish bounce. The 50% Fib also remains a key support zone.

A break below the top of wave 1 invalidates the wave 1-2-3 (purple) pattern but not the entire bullish outlook. Only a break below the bottom would invalidate the entire bullish pattern (red x).

EUR/USD 1 hour chart

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

For a look at all of today’s economic events, check out our economic calendar.

 

GBP/USD Daily Forecast – British Pound Remains Sensitive To Brexit News

GBP/USD Video 20.10.20.

British Pound Is Flat Against U.S. Dollar After Yesterday’s Volatile Trading Session

GBP/USD failed to settle above the resistance at 1.3000 and returned to the 50 EMA level at 1.2945 as traders reacted to news on Brexit negotiations.

GBP/USD got a boost after British minister Michael Gove stated that European Union’s Michel Barnier agreed to intensify negotiations. Later, Britain’s negotiator David Frost signaled that the country would not continue talks until EU offers consessions. This statement put material pressure on GBP/USD and pushed it back below 1.3000.

Most likely, GBP/USD will remain highly sensitive to Brexit news in the upcoming trading sessions.

In addition to Brexit talks, GBP/USD traders will focus on UK inflation data which will be published on Wednesday. Inflation Rate is expected to increase by 0.5% year-over-year in September while Core Inflation Rate is projected to grow by 1.3%.

Currently, Britain is fighting against the second wave of coronavirus, and it is interesting to see whether problems on the virus front put pressure on prices. Previously, Bank of England stated that it did not rule out an adoption of negative interest rate policy.

Just like other major central banks, Bank of England is trying to bring inflation to the 2% mark. If the inflation reports are weaker than expected, the odds of negative rates will increase.

Technical Analysis

gbp usd october 20 2020

GBP/USD continues its attempts to settle above the 50 EMA at 1.2945. In case GBP/USD manages to stay above the 50 EMA, it will have a chance to develop additional upside momentum and get to the test of the highs of the previous trading session near 1.3030.

I’d note that GBP/USD has mostly ignored the resistance at 1.3000 in recent sessions but there’s a chance that it may still face some resistance at this level on the way up.

In case GBP/USD moves above the resistance at 1.3030, it will head towards October highs near 1.3070.

On the support side, the nearest support level for GBP/USD is located at 1.2890. If GBP/USD gets below this level, it will gain downside momentum and decline towards the next support at 1.2815.

For a look at all of today’s economic events, check out our economic calendar.

USD/CAD Daily Forecast – U.S. Dollar Is Under Pressure At The Start Of The Week

USD/CAD Video 19.10.20.

Canadian Dollar Gains Ground On Strong Oil And U.S. Stimulus Hopes

USD/CAD is under pressure as the U.S. dollar is losing ground against a broad basket of currencies while WTI oil is trying to settle above the $41 level despite worries about the second wave of coronavirus in Europe.

The U.S. Dollar Index has managed to settle below 93.50 and tries to gain additional downside momentum on hopes for a new coronavirus aid package in the U.S.

According to recent reports, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin will resume negotiations today. Nancy Pelosi has previously set a deadline of October 20 for a vote in case Republicans and Democrats want to pass the new aid bill before the election.

Today, Canada reported that Wholesale Sales increased by 0.3% month-over-month in August. The report was fully in line with the analyst consensus.

This week, USD/CAD traders will have a chance to evaluate the latest inflation data from Canada which will be published on Wednesday. Inflation Rate is expected to grow by 0.4% year-over-year in September while Core Inflation Rate is projected to increase by 0.7%.

On Thursday, the Bank of Canada will announce its Interest Rate Decision and present its Monetary Policy Report. The rate is expected to stay unchanged at 0.25% so traders will focus on the Bank’s commentary about its plans to support the economy.

Technical Analysis

usd cad october 19 2020

USD to CAD managed to settle below the support at 1.3200 and developed material downside momentum. The nearest support level for USD to CAD is located at 1.3135.

In case USD to CAD moves below this level, it will head towards the next support level at October lows at 1.3100. A move below 1.3100 will open the way to the test of the support at 1.3050.

On the upside, the previous support at 1.3200 will likely serve as the first resistance level for USD to CAD. The 20 EMA is located in the nearby so this resistance level is set to be strong.

If USD to CAD settles above the resistance at 1.3200, it will gain upside momentum and move towards the next resistance at the 50 EMA at 1.3240.

For a look at all of today’s economic events, check out our economic calendar.

Dollar Comes Back to the Bearish Territory

Nasdaq is still below dynamic and horizontal resistance

SP500 is on a good way to break crucial levels and go higher

DAX sharply bounces from the 12960 points

Dollar Index ignores the inverse head and shoulders and creates a flag. Situation here is bearish

EURUSD are flirting with important dynamic resistance

GBPUSD are one step from breaking 1,3 – the most important level in the past few weeks

AUDUSD with a small bullish correction but the main sentiment is very negative

EURAUD makes another attempt to escape from the long-term rectangle

EURCHF breaks crucial support and later tests it as a resistance. Pretty standard price action move

Gold tries to go higher but the upper line of the pennant looks well defended

USD/JPY Price Forecast – US Dollar Continues to Show Exhaustion

The US dollar initially tried to rally during the trading session on Monday but gave back the gains as we continue to see a pressing lower. In fact, it is very likely that the market is trying to build up enough pressure to finally break down below the ¥105 level. That being said, the market is likely to see noisy trading more than anything else, but we are in a downtrend, and therefore I have no interest in trying to buy this pair.

USD/JPY Video 20.10.20

When you look at the pair, the Japanese yen has been strengthening over time, but it is a very choppy and slow move. This is because both of these are considered to be safety currencies, but ultimately the market is likely to go looking towards the ¥104 level underneath, which has been the recent bounce. Ultimately, I do think that we go through there and go looking towards the ¥102 level. The market may take some time to make that move, but ultimately, we are clearly forcing ourselves lower.

The Japanese bond markets are paying more of a return than the US bond markets, and what looks to be like an alternate reality for anybody who has been in the Forex game for more than about 20 minutes. With this, we continue to see downward pressure on the US dollar due to the massive amount of stimulus that people are expecting in America as well.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Price Forecast -British Pound Testing Major Figure

British pound traders started buying again at the beginning of the week on Monday, reaching towards the 1.30 level. Ultimately, the market continues to pay attention to this round figure in order to get some type of guidance. Quite frankly, with Brexit out there still causing headaches for a lot of traders, I believe that this is a market that will remain very volatile. The 1.31 level above is going to be the top of the overall range, but clearly the 1.30 level has been an area that has attracted a lot of attention.

GBP/USD Video 20.10.20

To the downside I see the 1.29 level offering a little bit of support, as well as even more support down at the 1.2750 level. That being said, the 200 day EMA is near there as well so that could cause a bit of support as well. Ultimately, I think that the market is going to continue to chop back and forth as we see a lot of noise. I do believe that the British pound has very serious risk out there when it comes to the idea of Brexit going right or wrong, and of course the US dollar looks to be making an argument to stabilize.

At this point, I do think that we are more likely to pull back then go higher, but quite frankly the real move will come later once we finally get some type of resolution to whether or not there is going to be a deal when it comes to Brexit. In the meantime, expect the latest headline or rumor to move the market back and forth as we continue to see volatility pick up.

For a look at all of today’s economic events, check out our economic calendar.

GBP/JPY Price Forecast – British Pound Rallies Towards Familiar Level

The British pound rallied significantly during the trading session on Monday to kick off the week, as we continue to see a lot of noise in this general vicinity. The 50 day EMA and the 200 day EMA both have come into the picture to show significant resistance in of course a bit of hesitation as the moving averages are both very flat. The size of the candlestick is of course relatively bullish as well, but ultimately, we are in an area of congestion and that should be paid close attention to.

GBP/JPY Video 20.10.20

The pair is of course very risk sensitive so that is something worth paying attention to as the risk appetite of traders around the world will continue to see things a bit different. Looking at this chart, it is easy to see that we have been in a bit of a range for a while so having said that this is likely to be a scenario where we have a lot of back and forth going forward, because quite frankly there are far too many things out there that could cause major issues in the short term. With this, expect “The Dragon” to be very noisy.

Unfortunately, we have to worry about Brexit and the occasional headline that is going to be coming out, which of course will throw a bit of a wrench into the works at times, but in the end this is a pair that I think is going to continue to bounce around between ¥138 above and ¥135 below until something more substantial happens.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Price Forecast – Euro Kicks Off the Week to the Upside

The Euro rallied significantly during the trading session on Monday, reaching towards the 1.18 level. This of course is a large, round, psychologically significant figure, and should be paid attention to for that reason. Furthermore, the uptrend line above should offer resistance, while the 1.17 level underneath offers plenty of support. At this point, the market looks very likely to continue chopping around and going sideways in general.

EUR/USD Video 20.10.20

The 50 day EMA is sitting underneath, sitting just above the 1.17 handle, so that of course is something that people will pay attention to. If we can break above the uptrend line that we had broken through, then we could go looking towards the 1.1850 level, and then the 1.19 level. There is a ton of resistance above, so I think that any rally at this point is probably going to be sold into. Having said that, we have recently made what could be thought of as a “higher low”, but I think it is up bit premature to call it that yet. After all, there are a lot of concerns out there that could drive money into the US dollar, so it is most certainly worth keeping that in the back of their mind. If we do break down below the 1.17 handle, then we could go down to the 1.16 level, and then possibly down to the 1.15 handle after that.

This pair is somewhat sensitive to risk appetite, so if something ugly happens, it will certainly sell this market. Furthermore, the European Union has to worry about the possibility of lockdowns and a continuation of plenty of new coronavirus infections that are rapidly increasing.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Price Forecast – Australian Dollar Continues Sideways Chop

The Australian dollar has rallied a bit during the trading session on Monday to break above the 0.71 handle. That being said, there is still a lot of resistance above, and it could continue to cause some issues. Furthermore, the 50 day EMA is sitting above as well, and a certain amount of attention will be paid to that indicator as per usual. Ultimately, this is a market that has recently broken an uptrend line, and now we are going to pay attention to the Aussie going forward as far as any potential weakness.

AUD/USD Video 20.10.20

Further exacerbating the situation has been the fact that the Reserve Bank of Australia has recently hinted very strongly that there were interest rate cuts coming down the road. If that is going to be the case, then it should work against the value of the Aussie in general. Underneath, there is significant interest and support right around the 0.70 level, as well as the 200 day EMA racing towards that figure. Ultimately, if we were to break through all of that then it would almost certainly bring in a significant break down in this pair, perhaps sending it down to the 0.68 level and beyond.

Looking at this chart, I believe that we are probably going to see a lot of back and forth type of trading, at least in the short term as we try to figure out where to go next. Keep in mind that this is also a very risk sensitive currency pair, so depending on what is going on in the world, there may or may not be a drive towards the US dollar.

For a look at all of today’s economic events, check out our economic calendar.