Daily Technical Analysis for Majors by Dukascopy

[KristinaDC]

XAU/USD tries to break from channel down

The gold prices continued to rise on Monday, following reports about the 1.3% PCE Price Index release as well as rumours that President Trump will chose Governor Powell take the Fed Chair seat. From technical point of view, this three-day growth has practically resulted in a breakout through the upper edge of recently formed descending channel. At the moment, the only barriers that constrain the bullion from climbing further are the 200-hour SMA near 1,277.16, the 61.8% Fibonacci retracement level at 1,279.00 and an alleged resistance near 1,281.57. One of these barriers as well as the weekly PP and the 100-hour SMA from the bottom are likely to constrain the pair from making major advances in the first half of the day. To be precise, until release of information on the US Consumer Confidence.

 

[KristinaDC]

EUR/USD moves horizontally in anticipation of FOMC meeting

Despite a release of various macroeconomic data yesterday, including the Euro Zone CPI and CB Consumer Confidence, the pair did not make any sharp moves and continued to move horizontally between the 100- and 55-hour SMAs. Such indifference nicely illustrates how traders are anticipating the upcoming FOMC Monetary Policy Statement and appointment of the new Fed Chair by President Trump. Given that yesterday’s information appeared to be better than expected plus general consensus that today’s meeting will not bring any unexpected news suggests that the pair is likely to continue moving horizontally between the 1.1658 and 1.1625 levels with a tendency to stick to the southern direction. A major breakout to the top also looks unlikely because that side contains multiple barriers. such as the monthly and weekly PP or the 100% retracement level and 200-hour SMA.

 

[KristinaDC]

GBP/USD rapidly climbs to 1.3280

Although the US economy showed convincing signs of growth, the Pound continued to rapidly appreciate against the Dollar yesterday. The fact that the cable managed to return to mid-October level near 1.3295 indicates how actively traders are anticipating interest rate hike by the Bank of England, which even overshadows today’s FOMC meeting. From technical point of view, there is a need to notice that both on hourly and daily timeframes the pair is free to surge up until the weekly R2 located at the 1.3370 level (after passing through the above resistance). Until release of the American data, the pair is expected to move horizontally near 1.3270. Afterwards, in case of plunge it is likely to be stopped by the 200-hour SMA fluctuating near 1.3180.

 

[KristinaDC]

USD/JPY surges above 113.80

As it was expected, a release of positive consumer sentiment data elevated the pair to the 113.70 mark, which represented an approximate location of different moving averages. During this trading session the exchange rate most probably is going to climb even higher amid the US labour data release and the subsequent Fed meeting. If that is the case, the pair is likely to break through resistance located between the 114.25 and 114.35 marks and try to reach the July 2017 maximum at 114.50. Generally, this advance is expected to have limited effect, as two days ago the pair made breakout from a long-term rising wedge formation. From this perspective, the Yen is expected to start slowly recovering against the Dollar in the nearest future.

 

[KristinaDC]

XAU/USD tests 200-hour SMA

As soon as markets found out that one the leading indicators, the Consumer Confidence Index, substantially exceed expectations the rate plunged to the 1,269.37 level. Nevertheless, the upcoming FOMC meeting as well as employment data release do not allow reinforcing this success. On the other hand, in order to break to top the pair still needs to bypass the weekly PP, the upper boundary of a descending channel and, most importantly, the 200-hour SMA. Previous failed attempts suggest that until the first release these barriers are likely to constrain active rise of the yellow metal’s price. In case of positive news, the pair is expected to repeat previous Thursday’s downfall and reach the weekly S1 at 1.264.23.

 

[KristinaDC]

EUR/USD remains undecided after FOMC meeting

None of the yesterday’s fundamental events led to notable price movements. In other words, the currency rate remained in a limbo between resistance at 1.1658 and support near 1.1610 that formed three days ago. The reason behind such weak reaction might be attributed to quite expected result of the FOMC meeting, which underlined solid economic growth, and anticipation of announcement of the next Fed Chair. Once this happens, the balance between bulls and bears will be distorted and the pair is likely to make a long awaited breakout. On the other hand, it already feels the pressure from the 55- and 100-hour SMAs, which are trying to push it towards the weekly PP at 1.1674. However, there are also signs of formation of a junior ascending channel. In that case, a rebound is expected to follow.

 

[KristinaDC]

GBP/USD prepares for BoE decision

In result of release of various American fundamental data, the cable stopped the surge and returned back to the 1.3250 mark, from which it made a rebound in the beginning of this trading session. Until announcement of the Bank of England decision, the pair most probably is going to move horizontally near the 1.3290 level. Afterwards, the Pound is widely expected to strengthen. The surge might be quite sharp, as northern side contains no barriers except for an alleged resistance at 1.3338 and the weekly R2 at 1.3370. The upside momentum might be additionally reinforced if President Trump will pick Governor Powell, as the new Fed Chair. The upward movement is also supported by existence of a medium-term ascending channel.

 

[KristinaDC]

USD/JPY trades in a limbo near 114.00

As the FOMC Meeting did not bring any unexpected news, the surge of the rate was limited. In other words, the pair once was stopped by resistance barrier at the 114.24 level. The fully-fledged rebound did not happen as well, as the 55-, 100- and 200-hour SMAs together with the weekly PP formed a strong support level. As a result, the pair found itself in a limbo between the 114.24 and 113.74 marks. Until the new Fed Chair announcement, the pair is expected to continue to move horizontally. If President Trump chooses Professor Taylor, bulls might try to elevate the rate not only to the weekly R1 at 114.34 but also to the July 2017 maximum at 144.50. If President Trump nominates Governor Powell, bears are likely to drag it down towards the monthly PP at 113.25.

 

[KristinaDC]

XAU/USD forms rising wedge pattern

The Fed Statement, indicating on the upcoming interest rate hike, led to short-term appreciation of the yellow metal. The pair formed a rising wedge pattern, which is expected to be broken to the south during this trading session. However, even then the buck is unlikely to reach the bottom trend-line of a dominant, long-term ascending channel. Such assumption is partially based on a combined support formed by the 55-, 100-, 200-hour SMAs together with the weekly PP, which are likely to restrain the fall of the rate, and partially on the fact that the pair is simultaneously moving in new junior ascending channel, which already consists of four confirmation points. However, an announcement of the new Fed Chair might create a necessary momentum to push the rate through all these barriers.

 

[KristinaDC]

EUR/USD soars amid Powell pick

The US President Donald Trump named Governor Powell as the new Fed Chair yesterday. However, markets showed little response to this decision, as it was widely expected. The news that actually moved the currency rate was disclosure of some details of the new tax reform. From technical point of view, the weakening of the buck resulted in formation of a junior ascending channel. However, the exchange rate is likely to fail to surge to its upper boundary, as that path is blocked by a combination of the weekly PP at 1.1674 and the falling 200-hour SMA near 1.1682. The likelihood of a rebound is also supported on daily chart where the pair additionally faces the 23.6% Fibonacci retracement level at 1.1679. Plus the average market sentiment remains 59% bearish.

 

[KristinaDC]

GBP/USD sinks to 1.3040 amid interest rate hike

A decision to raise the interest rate led to 110 points fall of the rate. Initially, the bottom line of a dominant ascending channel managed to halt the pair near 1.3120. However, the subsequent Governor Carney press conference boosted this process and bears managed to push the pair to the weekly S1. On daily chart it seems that yesterday’s downfall confirmed existence of a new medium-term descending channel. However, even in that case it looks like the Pound has to restore some lost positions before making a decisive breakout from the dominant ascending channel. An upcoming release of the British Services PMI might provide some small impulse for the upward movement. On the other hand, the two resistance levels near 1.3085 and 1.3107 most likely will manage to constrain the pair.

 

[KristinaDC]

USD/JPY anticipates US Employment Change release

None of the yesterday’s events created an impulse strong enough to force the pair to make a breakout from the rectangle pattern. Moreover, expectations of the upcoming release of information about the state of the American labour market led to formation of a minor symmetrical triangle pattern. A sharp plunge looks unlikely, as the southern side is reliably protected by a combination of the 100- and 200-hour SMAs together with the weekly PP at 113.79. On the other hand, a resistance area between the 114.25 and 114.35 levels managed to neutralize surge of the rate more than once in the past. Nevertheless, if the employment change appears to be really positive, traders with bullish outlook are likely to use this occasion to try to elevate the pair to the July 2017 maximum at 114.50.

 

[KristinaDC]

XAU/USD forms symmetrical triangle

In result of the previous trading session, the exchange rate has formed symmetrical triangle pattern. A combination of the 55-, 100- and 200-hour SMAs in conjunction with the weekly PP located at 1,274.00 suggests that the pair most probably is going to make a breakout in the upward direction. On the other hand, that side also contains a combined resistance set up by the 61.8% Fibonacci retracement level and the updated monthly PP 1,279.41. For this reason, the fully-fledged breakout most probably will be postponed until release of information on the American employment change and change in salaries. There is a need to take into account that on daily chart the pair has formed an ascending triangle pattern, which implies the further appreciation of the yellow metal against the buck.

 

[KristinaDC]

EUR/USD falls to 1.16 amid surprising US data

A release of better that expected data on the US ISM Non-Manufacturing PMI led to sharp appreciation of the buck against the common European currency and resulted in a breakout from two junior ascending channels. An active recovery of the exchange rate seems unlikely, as the northern is contains a bunch of technical indicators, such as the weekly PP at 1.1631 and the falling 55- and 100-hour SMAs. Moreover, there is a slope on a daily chart that is likely to serve as an additional barrier. For this reason, the pair is expected to gradually slip to the bottom towards support area near the 1.1580 mark. However, for now the rate is squeezed between two vises at 1.1625 and 1.1600 and might continue this horizontal movement until catching a proper momentum.

 

[KristinaDC]

GBP/USD stuck at monthly S1 at 1.3073

Initially, the Pound tried to restore some and even used a momentum provided by release of better than expected UK Services PMI to climb to the 1.3107 mark. However, the subsequent release of positive American data neutralized this attempt and returned the pair back to the monthly S1 at 1.3073.

Unless traders receive some clear signal the currency rate might continue moving in such indecisive manner for some while. Nevertheless, a pressure from the 100-day SMA on a daily chart is likely to push the pair down even further.

Although an attempt to surge to the 55-hour SMA is possible, but eventually it is still expected to slip to support area near the 1.3030 mark.

 

[KristinaDC]

USD/JPY reaches July 2017 maximum at 114.50

A release of data that beat analysts’ expectations not only signified a breakout from symmetrical triangle pattern but also provided a necessary impulse to reach the maximum of July 2017 located at the 114.50 level. That fundamental event was also significant for a couple of other reasons. First of all, it became evident that the pair is moving in a new minor ascending channel. Second, an upcoming breakout from that pattern is unlikely due to pressure from the 55-, 100- and 200-hour SMAs that are rising along its southern boundary. This, in turn, implies that currency rate has a good chance to bypass the weekly R1 at 114.69 and reach a combined resistance set up by the monthly R1 and the March 2017 maximum at 115.00 and the slope that started to form in the end of 2015.

 

[KristinaDC]

XAU/USD falls to 1,266 amid US PMI data

As it was expected, formation of a symmetrical triangle pattern embodied anticipation of release of the American data on Friday. As the actual results beat expectations, bears managed to strengthen the buck against the yellow metal by 0.84% just in one hour. There is a need to notice two things. First, a rebound near the 1,266.00 mark can be interpreted as a second reaction low a previously undetected junior ascending channel. This assumption implies gradual movement in the northern direction. However, in short term this recovery looks doubtful due to combined resistance that is forming from the weekly PP at 1,273.35 and the falling 55-, 100- and 200-hour SMAs. There is also a need to take into account an existence of a slope that consists of Sep 7, Oct 15 and Nov 2 maximums.

 

[KristinaDC]

EUR/USD tests 1.1580

During the previous trading session the rate slipped to support area near the 1.1580 mark, as expected, and returned to the place from which it started. As the pressure from falling 55- and 100-hour SMAs hasn’t gone anywhere, the pair is still projected to move in the southern direction towards the weekly S1 located at the 1.1572 level. There is also a need to take into account an additional barrier formed by the slope that is moving along the falling 200-hour SMA. Moreover, the market continues to be dominated by bears, as the number of traders with bullish sentiment reaches only 40% on average. Even if the Euro makes an attempt to surge amid an impulse from Draghi speech in Frankfurt, this recovery is expected to have a limited effect due to additional resistance set up by the weekly PP at 1.1631.

 

[KristinaDC]

GBP/USD meets resistance at 1.3170

Due to quite active sell-off of the buck yesterday, the cable managed to break to the top instead of falling to support zone near the 1.3030 mark. However, the surge was boldly stopped by a combination of the 100- and 200-hour SMAs together with the 61.8% Fibonacci retracement level at 1.3166. For this reason, the currency rate is likely to start moving back to the 1.3120 mark. However, there is a need to take into account existence of an unconfirmed three-week long descending channel consisting of three reaction lows and one reaction high. If this assumption is true, then in medium perspective the Pound should continue its gradual recovery. But in daily range its valuation is expected to be influenced by release of the Halifax HPI and the Fed Chair Yellen speech.

 

[KristinaDC]

USD/JPY falls to 113.70 but quickly recovers

From technical point of view, the currency rate had all means to make a rebound near the 114.24 mark and make one more attempt to reach the monthly R1 at 114.84. However, changes in ten-year treasury rates led to depreciation of the buck and drove the pair out of an ascending channel. The downfall was not sharp, as the pair managed to quickly recover near the 113.73 mark. Although location of moving averages and pivot points indicate on recovery of the Dollar, there is a need to bear in mind potentially high volatility that could be caused by fundamental factors.

Namely, traders might suddenly turn to safe haven Yen if Donald Trump continues his hot rhetoric during the visit to South Korea and other Asian countries.