Market News


TIME
2019-10-23 23:17 GMT
Pair
GBP/USD
Summary
Despite mounting speculations of a general election in the UK, GBP/USD clings to 1.2915 during early Thursday morning in Asia.
Content
  • GBP/USD awaits the EU’s word on Brexit extension, ignores fears of a general election, the second referendum.
  • No major British data highlights the US economic calendar, trade/Brexit news as the key catalysts.

Despite mounting speculations of a general election in the UK, GBP/USD clings to 1.2915 during early Thursday morning in Asia.

Be it the ITV interview of the United Kingdom’s (UK) Chancellor or the UK Times story, everything signals increasing odds for a general election, not to mention the opposition Labour party’s mild push for the second referendum.

However, the key to the likely election is the European Union’s decision over the British request to extend the Brexit deadline from October 31.

The Cable reacted positively to rising expectations of a soft Brexit after various news sources confirmed that the EU will wait till Friday, possibly till early Monday, before announcing its verdict on the Brexit extension.

With this, the market’s risk-tone improved and could be well witnessed in the performances of the US 10-year treasury yields and Wall Street.

Adding to the pair’s strength could be the US Dollar (USD) weakness on the back of downbeat prints of second-tier housing and Mortgage Applications data, coupled with upbeat news concerning the US-China trade deal.

While no major economics are up for publishing form the UK’s side, investors will observe the United States' (US) economic calendar that carries monthly readings of Durable Goods Orders and some more housing numbers, not to forget weekly jobless figures.

Technical Analysis

The Cable bulls are waiting for an upside break of 1.3015 to aim for 1.3100 and May month top surrounding 1.3180 while pair’s declines below 1.2840 can recall June month high around 1.2785 and 200-day Simple Moving Average (SMA) level of 1.2715.


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.2822 S2: 1.2771 S3: 1.2681 R1: 1.2963 R2: 1.3053 R3: 1.3104
Trend Index
Recommendation : Bullish Strength : 1
OBOS Index
OBOS Index : Overbought

TIME
2019-10-23 23:01 GMT
Pair

Summary
South Korea Gross Domestic Product Growth (QoQ) registered at 0.4%, below expectations (0.5%) in 3Q
Content

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2019-10-23 23:01 GMT
Pair

Summary
South Korea Gross Domestic Product Growth (YoY) below expectations (2.1%) in 3Q: Actual (2%)
Content

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2019-10-23 22:50 GMT
Pair
AUD/JPY
Summary
Not only mixed activity numbers from Australia but recent downbeat headlines concerning the Brexit also weigh on the AUD/JPY pair.
Content
  • AUD/JPY fails to extend bounce off 100-day EMA.
  • Mixed Aussie PMI data, Brexit headlines recently weigh on the pair.
  • Statistics from Japan, risk catalysts will be on the traders’ radar.

Not only mixed activity numbers from Australia but recent downbeat headlines concerning the Brexit also weigh on the AUD/JPY pair as it pulls back to 74.45 during the early Asian session on Thursday.

The preliminary readings of October month activity numbers from the Commonwealth Bank of Australia (CBA) and Markit portray mixed momentum. The reason being an upbeat manufacturing outcome confronting weak services PMI, which in turn results in a lesser than prior 52.0 to 50.7 reading of the Composite Purchasing Managers’ Index (PMI).

Elsewhere, risks of a snap election in the United Kingdom (UK) seem to increase off-late with the Finance Minister Sajid Javid supporting the same on the ITV interview while the opposition Labour Party’s finance spokesman showing readiness whenever it comes.

The pair bounced off from 100-day Exponential Moving Average (EMA) on Wednesday after upbeat trade/Brexit headlines favored the market’s risk tone. Also adding to the pair’s strength was the news that the Bank of Japan (BOJ) was considered to have a gloomier view on the economic outlook.

Investors will now keep a close eye over Japan’s Preliminary reading of October month Jibun Bank Manufacturing PMI, expected 48.8 versus 48.9, followed by Leading Economic Index and Coincident Index for August, which are both likely to remain unchanged at 91.7 and 99.3 respectively.

It should also be noted that the recent news concerning the US-China trade deal has been positive and trade/Brexit headlines will keep occupying the driver-seat for now.

Technical Analysis

The pair needs a successful break above the monthly top surrounding 74.85 in order to visit 75.15/20 area including late-June to early-July lows. Alternatively, a downside break of a 100-day EMA level of 74.00 could recall 50-day EMA level of 73.38 to the chart.


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 74.18 S2: 73.98 S3: 73.65 R1: 74.71 R2: 75.04 R3: 75.24
Trend Index
Recommendation : Bullish Strength : 1
OBOS Index
OBOS Index : Overbought

TIME
2019-10-23 22:25 GMT
Pair
GBP/USD
Summary
ITV recently published a story that relies on an interview of the United Kingdom’s (UK) Finance Minister Sajid Javid.
Content

ITV recently published a story that relies on an interview of the United Kingdom’s (UK) Finance Minister Sajid Javid. During the interview, as per the news, the Chancellor stood ready to release the report on November 06 while also showing the government’s readiness to push for October 31 as a Brexit deadline. It was also mentioned that the appointment process for the Bank of England (BOE) Governor after Mark Carney leaves, is also on track.

Key quotes

“The budget remains [November 6]. When it comes to Brexit, we are working as much and as hard as we can to still do that on October 31, despite what happened in parliament.”

"It's just worth recalling that when the new government came into office some three months ago and Boris Johnson became prime minister, everyone said 'you're not going to be able to reopen this agreement, you're not going to be able to get rid of the backstop, you're not going to be able to reach a new deal.”

"But we've delivered on all three... This government achieved a Brexit deal, but then parliament decided to delay the deal. We can get it done by October 31."

FX implications

Although the British Pound (GBP) shows no major reaction to the news, this could weigh on the recent optimism backed by concerned of a soft Brexit, which in turn might drag the GBP/USD down and negatively affect the market’s risk sentiment.


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.2822 S2: 1.2771 S3: 1.2681 R1: 1.2963 R2: 1.3053 R3: 1.3104
Trend Index
Recommendation : Bullish Strength : 1
OBOS Index
OBOS Index : Overbought

TIME
2019-10-23 22:11 GMT
Pair
AUD/USD
Summary
With mixed readings of activity numbers, AUD/USD holds on to recovery gains while flashing 0.6855 as a quote during early Thursday morning in Asia.
Content
  • AUD/USD benefits from Commonwealth Bank activity numbers.
  • An absence of negative signals from Trade/Brexit headlines keeps the Aussie away from further declines.
  • The US statistics, trade/Brexit news will be followed for fresh impulse.

With mixed readings of activity numbers, AUD/USD holds on to recovery gains while flashing 0.6855 as a quote during early Thursday morning in Asia.

Preliminary readings of October month Commonwealth Bank Purchasing Managers’ Index (PMI) suggest the manufacturing PMI has grown more than 49.0 forecasts to 50.1 while Services counterpart lagged below 52.2 to 50.8. With this, the Composite PMI declined below 52.0 to 50.7.

While the risk of no-deal Brexit is mostly avoided and taken care of, recent news from The Sun mentioned the Tory revolt against the United Kingdom (UK) Prime Minister (PM) Boris Johnson.

In a case of the US-China trade deal, diplomats from both the ends are trying to portray a rosy picture of efforts and likeliness of a trade deal. However, the United States’ (US) proposal to have an anti-dumping investigation on Chinese aluminum exporters isn’t a hidden thing while China’s readiness to counter the US pressure by taking the help from the World Trade Organization (WTO) also shows a cold war.

Given the absence of data on the Australian side during the rest of the day, investors will keep an eye over trade/Brexit headlines for fresh impulse. However, the economic calendar gets active during the US session with data ranging from activity numbers to Durable Goods Orders up for publishing. Among them, Durable Goods Orders is likely to gain major market attention.

“We expect durable goods orders to post a -1.3% m/m contraction in September (mkt: -0.7%) largely on the back of a large decline in vehicle new orders. More importantly, we expect both core orders series to also disappoint in September, with durables ex-transportation and core capex orders declining -0.2% and -0.8%, respectively. Separately, the Kansas City Fed index and the preliminary Markit survey should provide additional clues regarding the performance of the manufacturing sector in October, says TD Securities.

It should also be noted that the US Dollar’s (USD) reaction to the European Central Bank (ECB) meeting outcome will also be the key. Today’s ECB will be the last under the presidency of Mario Draghi before Christine Lagarde takes his seat. No fireworks are expected from the meeting after the last one's heavy dose of monetary easing.

Technical Analysis

Only a sustained break above 0.6900 mark, which crosses September month top, could propel the pair towards July 10 low nearing 0.6910 before highlighting 0.6950 for buyers. Absence of which could keep the sellers on the lookout for 0.6811/10 horizontal support including highs of September 20 and October 11.


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 0.6842 S2: 0.6829 S3: 0.6808 R1: 0.6877 R2: 0.6898 R3: 0.6911
Trend Index
Recommendation : Bearish Strength : -3
OBOS Index
OBOS Index : Overbought

TIME
2019-10-23 22:03 GMT
Pair

Summary
Australia Commonwealth Bank Manufacturing PMI above forecasts (49) in October: Actual (50.1)
Content

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2019-10-23 22:02 GMT
Pair

Summary
Australia Commonwealth Bank Services PMI below forecasts (52.2) in October: Actual (50.8)
Content

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2019-10-23 22:02 GMT
Pair

Summary
Australia Commonwealth Bank Composite PMI: 50.7 (October) vs previous 52
Content

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2019-10-23 21:43 GMT
Pair
NZD/USD
Summary
Given the broad improvement in the market’s risk-tone, coupled with an absence of negative headlines concerning the US-China trade deal, NZD/USD stays upbeat.
Content
  • NZD/USD benefits from the market’s risk-on sentiment, stays close to monthly high.
  • Trade headlines have lately been positive.
  • A light economic calendar highlights news to remain as the key catalyst.

Given the broad improvement in the market’s risk-tone, coupled with an absence of negative headlines concerning the US-China trade deal, NZD/USD stays positive around six-week high while taking rounds to 0.6422 during the initial Asian session on Thursday.

Not only upbeat trade sentiment but reducing risk of no-deal Brexit also helped the market’s risk setting and helped the Kiwi overnight.

On the trade front, the United States’ (US) Trade Secretary Wilbur Ross and China’s Commerce Minister Zhong Shan were both positive and prepared to have a good trade deal in their latest public appearances.

Also supporting the momentum was the US Dollar (USD) weakness on the back of downbeat housing data at the home.

Given the absence of any major data from New Zealand, investors will keep an eye over Australia’s activity numbers to have a further direction. However, this won’t reduce the importance of trade headlines.

Technical Analysis

The 0.6448/53 area comprising September high and 100-day Exponential Moving Average (EMA) becomes the key for the pair as a break of which could recall 0.6500 back to the chart. Alternatively, the 50-day EMA level around 0.6374 seems to be the nearby support ahead of 0.6355.


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 0.6388 S2: 0.6375 S3: 0.6350 R1: 0.6425 R2: 0.6449 R3: 0.6462
Trend Index
Recommendation : Bullish Strength : 1
OBOS Index
OBOS Index : Neutral

TIME
2019-10-23 21:34 GMT
Pair
AUD/USD
Summary
Australia is set to disclosure the preliminary estimates of the October Commonwealth Bank of Australia and Markit Economics Manufacturing and Services
Content

Australia is set to disclosure the preliminary estimates of the October Commonwealth Bank of Australia and Markit Economics Manufacturing and Services Purchasing Managers' PMI in the upcoming minutes. Both indexes are expected below September ones, at 49.0 and 52.2, respectively. There is no forecast for the Composite PMI, although the previous reading stands at 52.

Although the expected declines are slight, they could anyway have a negative impact of AUD/USD, as the Australian economy is hanging by a thread, with the persistent menace of the RBA taking the main benchmark rate down to 0.0%.

Given that the pair has managed to close the day with gains, in spite of the ongoing dismal mood, upbeat reports can take it up to the 0.6900 region before bears jump back in.

According to Valeria Bednarik, FXStreet Chief Analyst, “the AUD/USD pair is neutral in the short-term, as, in the 4 hours chart, it continues developing below a flat 20 SMA, while technical indicators hold directionless around their midlines. Nevertheless, the dollar’s broad weakness favors a recovery during the upcoming hours, which will likely depend on data. A key resistance comes at 0.6900, with large stops suspected above it.”   

 

 


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 0.6842 S2: 0.6829 S3: 0.6808 R1: 0.6877 R2: 0.6898 R3: 0.6911
Trend Index
Recommendation : Bearish Strength : -3
OBOS Index
OBOS Index : Overbought

TIME
2019-10-23 21:31 GMT
Pair

Summary
North Korean state media, KCNA, recently praised the relations between the United States (US) President Donald Trump and the North Korean leader Kim.
Content

North Korean state media, KCNA, recently praised the relations between the United States (US) President Donald Trump and the North Korean leader Kim Jong-un. However, the news criticized the rest of the US political circle while also waiting to see how the US passes the year.

Key quotes

“North Korea says leader Kim and US President Trump continue to have close relations.”

“Contrary to President Trump, US political circles remain hostile to North Korea.”

“North Korea will see how wisely the US passes the end of the year.”

FX implications

No major market reactions to the news but the traditional safe-havens like the Japanese Yen (JPY) and Gold could benefit if any more developments arrive.


Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2019-10-23 21:22 GMT
Pair
EUR/USD
Summary
Here is what you need to know Thursday, October 24th: Action across the FX board remained limited by the absence of relevant macroeconomic data and un
Content

Here is what you need to know Thursday, October 24th:

  • Action across the FX board remained limited by the absence of relevant macroeconomic data and uncertainty surrounding Brexit. The ball rolled the EU’s side of the court, as European leaders should now decide on a delay to the UK’s departure from the Union. Market talks suggest that the EU27 is willing to grant a three-month extension, although a formal announcement is not expected before Friday.
  • Tensions between the US and China resurged on news indicating that China is seeking $2.4 billion in retaliatory sanctions against the US for non-compliance with a WTO ruling in a tariff dispute against the country back in the Obama era.
  • The American dollar lost some ground during US trading hours, as tepid earnings reports revived concerns about an upcoming US recession. EUR/USD and GBP/USD recovered within familiar levels.
  • The BOJ was reported to be lowering its forecast for economic growth and inflation this year. The central bank is scheduled to meet by the end of the month, and ahead of the event, market talks made the round suggesting that members see little merit in an interest-rate cut this month, but rather prefer to save ammunition for the case economic conditions deteriorate further.
  • Crude oil prices soared to fresh October highs after the US EIA reported a large draw in stockpiles of 1.7 million barrels.
  • Precious metals remained depressed within familiar levels, with spot gold retreating from 1,496.25.
  • Cryptocurrencies plummeted early US session with BTC/USD  at fresh 5-month lows in the 7,400.00 region. Tensions related to Facebook and Libra weighed the market.
  • The ECB is set to have a monetary policy meeting, the last one presided by Mario Draghi. 

Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.1108 S2: 1.1092 S3: 1.1067 R1: 1.1150 R2: 1.1176 R3: 1.1192
Trend Index
Recommendation : Bullish Strength : 1
OBOS Index
OBOS Index : Neutral

TIME
2019-10-23 21:21 GMT
Pair

Summary
At the start of Thursday’s Asian session, The Sun came out with news stating that the United Kingdom’s (UK) Prime Minister (PM) Boris Johnson faces a revolt.
Content

At the start of Thursday’s Asian session, The Sun came out with news stating that the United Kingdom’s (UK) Prime Minister (PM) Boris Johnson faces a growing revolt from the Cabinet and backbench Tory MPs over his threat to hold a general election before delivering Brexit. The story mentions the Tory leaders’ threat to call a snap election if the European Union (EU) agrees for a three-month Brexit extension till January 31.

Key quotes

The most ardent proponent for an immediate general election is the PM’s chief adviser in No10, Dominic Cummings.

Vote Leave guru Mr. Cummings believes holding a nationwide poll before the UK leaves would deliver tens of thousands of pro-Brexit Labour voters in key swing seats, and the Commons will continue to block the deal.

Northern Ireland Secretary Julian Smith went public with his preference, saying: “What I want is to listen to Northern Ireland MPs, get a programme motion that is to the satisfaction to the majority of people in this House, and resolve this situation.”

A YouGov poll revealed Brits want an early election to end the Westminster logjam, but the nation is split down the middle on Brexit lines on whether it should be before or after Brexit happens.

FX implications

Being the early Asian hours most markets are quiet and hence no major reaction to the news could be witnessed. However, the same could weigh on the British Pound (GBP) on the UK market’s open.


Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2019-10-23 21:02 GMT
Pair

Summary
Gold is consolidating the rally of the last months while currently hovering below the 1,500 psychological mark.  Gold remains under pressure below both the 1,5
Content
  • Gold is consolidating the rally of the last months while currently hovering below the 1,500 psychological mark. 
  • Gold remains under pressure below both the 1,5000 level and the 50-day SMA. 
 

Gold daily chart

 
The yellow metal is trading in a bull trend above its 100 and 200-day simple moving averages (DSMAs). However, in the last weeks of trading, the safe-haven metal has been consolidating near $1,500 per troy ounce and below its 50 SMA on the daily chart.

Gold four-hour chart

 
Gold is trading below its 100 and 200 simple moving averages (SMAs) on the four-hour chart while remaining confined under the 1,500 psychological mark. The bias seems to be tilted to the downside in the medium term. A break below 1,475 can expose the 1,460 and 1,420 support levels.
 
On the flip side, a daily closing above the 1,500 figure could trigger a correction towards the 1,510/1,520 resistance zone.

 

Additional key levels

 


Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2019-10-23 21:00 GMT
Pair

Summary
Chile BCCH Interest Rate meets forecasts (1.75%) in October
Content

Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2019-10-23 19:51 GMT
Pair
EUR/USD
Summary
The EUR/USD pair gained momentum late during the American session amid a decline of the US Dollar across the board. The pair broke above 1.1125 and cl
Content
  • DXY turns negative late during the American session as recovery fades. 
  • Euro up versus US Dollar and Swiss Franc, steady against Pound, ahead of ECB meeting. 

The EUR/USD pair gained momentum late during the American session amid a decline of the US Dollar across the board. The pair broke above 1.1125 and climbed to 1.1139, reaching a fresh daily high. 

Near the end of the session holds near the top, posting modest gains for the day. The US Dollar weakened despite the rebound in US yields. The DXY is down 0.10% at 97.43 after hitting earlier today a 5-day high at 97.65. 

On Thursday, key economic data from the Eurozone and the US is due with the PMIs. The key event will be the European Central Bank (ECB) meeting. It will be the last time from Mario Draghi and no change in monetary policy is expected. Analysts at TD Securities expect EUR/USD to remain tame. “Most directional risks favor moderate downside as we expect Draghi to ride off on a dovish note. Market attention will soon turn to any early hints on policy preferences from incoming President Lagarde.”

From a technical perspective, the short-term bias points to the upside but price is testing the upper limit of a descendant channel. A consolidation on top of 1.1140 would point to further gains while below, EUR/USD is likely to consolidate between 1.1115 and 1.1140 ahead of the Asian session.
 

EUR/USD

 


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.1108 S2: 1.1092 S3: 1.1067 R1: 1.1150 R2: 1.1176 R3: 1.1192
Trend Index
Recommendation : Bullish Strength : 1
OBOS Index
OBOS Index : Neutral

TIME
2019-10-23 19:20 GMT
Pair

Summary
The US Dollar Index (DXY) is losing steam at the end of the New York session.  The DXY recovery would gain strength on a daily close above 97.60 resistance.
Content
  • The US Dollar Index (DXY) is losing steam at the end of the New York session. 
  • The DXY recovery would gain strength on a daily close above 97.60 resistance. 
 
 
 

DXY daily chart

 
The US Dollar Index (DXY) is trading above the 200-day simple moving average (DMA) after a steep pullback down. 

DXY four-hour chart

 
DXY is trading below its main SMAs, suggesting bearish momentum in the medium term. However, the market traded above 97.60 this Wednesday but failed to register a daily close above the level, making the nascent recovery slightly weaker in the short term. The main support is seen at 97.20, followed by 96.72.
 

DXY 30-minute chart

 
DXY is trading above its 100 SMAs, suggesting a correction in the short term. The recovery would gain credibility on a daily close above 97.60. A break above the level can expose the next key resistance at 97.90 and the 98.20 level.

Additional key levels

 


Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2019-10-23 19:05 GMT
Pair
USD/JPY
Summary
Analysts at MUFG Bank, consider that if the macro backdrop improves, with Brexit and US-China trade risks receding, the Japanese Yen could weaken furt
Content

Analysts at MUFG Bank, consider that if the macro backdrop improves, with Brexit and US-China trade risks receding, the Japanese Yen could weaken further but they believe that would be more against non-dollar currencies. 

Key Quotes:

“On a year-to-date basis, the yen is the 2nd best performing G10 currency – only the Canadian dollar has done better. That reflects the yen being the top performing G10 currency in both Q2 and Q3 during more pronounced risk-off trading conditions when the 10-year UST bond yield fell from 2.40% to 1.65%. We are now of course into Q4 with the global financial market backdrop a little more favourable that suggests the yen could be the loser, helping to push USD/JPY higher. A Brexit deal between the EU and the UK has now been done and passed in parliament while there is optimism
over a partial US-China deal being signed in Santiago, Chile at the APEC meeting on 16th-17th November.”

“US yields remain considerably lower now than prior to the risk-off period and hence the scope for any sustained move higher in USD/JPY is limited. Will a US-China deal greatly reduce the global trade uncertainties? We think not. A partial deal will leave many aspects still to be agreed and President Trump could well then turn his focus to Europe. In addition, a Brexit deal, while eliminating the risk of no-deal does not eliminate the uncertainties over the future trading relationship between the UK and the EU.”

“We do not expect a notable shift in Japanese investor risk appetite. Portfolio outflows will remain largely hedged and Japan’s current account surplus, largely made up of an investment income surplus, will act to provide continued support for the yen. However, given US-China and Brexit developments
coupled with another rate cut by the Fed, we are inclined toward a neutral bias given expectations are already high for some form of a deal in November.”


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 108.37 S2: 108.26 S3: 108.08 R1: 108.66 R2: 108.84 R3: 108.95
Trend Index
Recommendation : Bullish Strength : 3
OBOS Index
OBOS Index : Neutral

TIME
2019-10-23 18:57 GMT
Pair
USD/CAD
Summary
Analyzing the outcome of Canada's 43rd general election, Fitch Ratings said that the new minority parliament raises "fiscal questions for Canada." "Re
Content

Analyzing the outcome of Canada's 43rd general election, Fitch Ratings said that the new minority parliament raises "fiscal questions for Canada."

"Return of a hung parliament following Canada's recent federal election should not lead to significant changes to major economic policies," Fitch explained. "Potential risks to Canada's debt stabilization would rise if there were an economic downturn."

The USD/CAD pair, which slumped to 1.3070 area as rising crude oil prices boosted the demand for the commodity-related Loonie, ignored Fitch's comments and was last seen trading at 1.3080, down 0.1% on the day. Below are some additional takeaways, per Reuters.

"Canada's 2020 budget will be key signal if new parliamentary makeup will lead to greater spending pressures, increased federal deficit."

"Potential for federal fiscal loosening could raise questions regarding the trajectory of Canada's high general government debt/gdp burden."

"Key issues like USMCA trade agreement are likely to find sufficient consensus for passage given support from major parties in Canada."


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.3070 S2: 1.3044 S3: 1.3017 R1: 1.3123 R2: 1.3150 R3: 1.3176
Trend Index
Recommendation : Bearish Strength : -3
OBOS Index
OBOS Index : Oversold

TIME
2019-10-23 18:36 GMT
Pair
AUD/USD
Summary
After posting small daily losses on Tuesday, the AUD/USD pair struggled to make a decisive move in either direction on Wednesday and looks to close th
Content
  • Lack of macroeconomic data releases causes markets to stay calm on Wednesday.
  • US Dollar Index looks to end the day flat near 97.50.
  • Coming up: Manufacturing and Services PMI data from Australia.

After posting small daily losses on Tuesday, the AUD/USD pair struggled to make a decisive move in either direction on Wednesday and looks to close the day near the 0.6850 handle.

The lack of major developments surrounding the United States (US)-China trade conflict and significant macroeconomic data releases on Wednesday is forcing major currency pairs to stay in a consolidation phase.

Eyes on PMI reports

In the early trading hours of the Asian session on Thursday, the Commonwealth Bank of Australia and Markit Economics will be publishing the preliminary Manufacturing and Services Purchasing Managers' Index (PMI) reports. Markets expect the Manufacturing PMI to fall to 49 in October from 50.3 in September to reveal contraction in the sector's economic activity.

Lower-than-expected PMI figures could put the AUD under selling pressure as it's likely to be seen as a factor that would force the Reserve Bank of Australia (RBA) to preserve its dovish policy outlook.

On the other hand, the US Dollar Index, which registered modest recovery gains on Tuesday, looks to finish the day virtually unchanged on Wednesday. Markit Manufacturing and Services PMI data, durable good orders, and new home sales data from the US on Thursday could cause volatility to heighten in the second half of the day.

Technical levels to watch for

 


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 0.6842 S2: 0.6829 S3: 0.6808 R1: 0.6877 R2: 0.6898 R3: 0.6911
Trend Index
Recommendation : Bearish Strength : -3
OBOS Index
OBOS Index : Overbought

TIME
2019-10-23 18:31 GMT
Pair

Summary
The USD/MXN is falling modestly on Wednesday after being unable to hold to gains. It peaked near 19.20 but then pulled back and as of writing trades a
Content
  • Mexican peso turns positive against US Dollar after trading most of the day in negative. 
  • USD/MXN remains biased to the downside, but above key support levels. 

The USD/MXN is falling modestly on Wednesday after being unable to hold to gains. It peaked near 19.20 but then pulled back and as of writing trades at 19.10, down three cents for the day. 

The Mexican peso recovered ground after falling during the Asian and European sessions. The improvement in market sentiment and a mixed US Dollar contributed to the retreat of USD/MXN. 

The Mexican Peso remains strong, unaffected by the recent turmoil in Sinaloa, and despite all that is going in Latin America with riots in Chile and Ecuador and ahead of presidential elections in Argentina. The Brazilian Real is the best performer in the region following the approval of the pension reform. 

Levels to watch 

The pair is biased to the downside but it reached an area of key supports. At 19.10 there is a short-term horizontal and below around 19.05, an uptrend line from 2017. A consolidation below 19.05 would clear the way to more losses, with a potential target around year-to-day lows at 18.74. 

On the upside, every recovery has been short-lived showing that the US Dollar still lacks of strength. If it manages to hold on top of 19.20 it would remove some of the bearish pressure while above 19.30, the outlook would start to favor the upside. 
 

 


Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2019-10-23 17:33 GMT
Pair

Summary
Citing three senior EU diplomats, Reuters on Wednesday reported that ambassadors of the 27 EU member states made no decision on British Prime Minister
Content

Citing three senior EU diplomats, Reuters on Wednesday reported that ambassadors of the 27 EU member states made no decision on British Prime Minister Boris Johnson's request for an extension to Brexit. 

However, diplomats further added that they were expecting to come to a final decision on Friday and that it was likely a three-month delay to the end of January would be granted.

The British Pound ignored these remarks and was last seen trading at 1.2883, adding 0.1% on a daily basis.


Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2019-10-23 17:32 GMT
Pair
USD/JPY
Summary
Wall Street indices are in the green this Wednesday, lessening the demand for the Japanese Yen.  The level to beat for bulls is the 108.70 resistance.
Content
  • Wall Street indices are in the green this Wednesday, lessening the demand for the Japanese Yen. 
  • The level to beat for bulls is the 108.70 resistance.
 
 

USD/JPY daily chart

 
 
USD/JPY is trading in a bear trend below the 200-day simple moving average (DSMA). The spot is correcting the October bull run. The intraday positive sentiment in Wall Street is diminishing the demand for Yen, helping USD/JPY to climb to daily highs. 
 

 

USD/JPY four-hour chart

 
 
USD/JPY is trading above the 108.56 resistance and the main SMAs on the four-hour chart, suggesting a bullish momentum in the medium term. If the 108.70 resistance is broken, there seems to be little relevant resistance before the 108.95 price level, according to the Technical Confluences Indicator. Further up lies the 109.16 level. 

USD/JPY 30-minute chart

 
 
USD/JPY is trading above its major SMAs on the 30-minute chart, suggesting a bullish bias in the near term. Support is seen at the 108.56 and 108.45 price levels, according to the Technical Confluences Indicator. 

 

Additional key levels

 


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 108.37 S2: 108.26 S3: 108.08 R1: 108.66 R2: 108.84 R3: 108.95
Trend Index
Recommendation : Bullish Strength : 3
OBOS Index
OBOS Index : Neutral

TIME
2019-10-23 16:55 GMT
Pair

Summary
Analysts at the Research Department at BBVA kept the full-year growth forecast at 2.2% for the US in 2019, followed by further deceleration to 1.5% in
Content

Analysts at the Research Department at BBVA kept the full-year growth forecast at 2.2% for the US in 2019, followed by further deceleration to 1.5% in 2020, around the trend rate.

Key Quotes: 

“Global growth has slowed markedly this year but remains positive. We forecast 2019 growth at 3.1% followed by a slight improvement in 2020 to 3.2%.”

“Trade tensions have been weighing on capital spending, and sentiment remains depressed with forward-looking indicators pointing toward more slowdown to come. More worryingly, there are beginning to be signs that this is spilling over to the services sector.”

“Consumer fundamentals remain reasonably solid, apart from trade, but the labor market is softening. Payrolls growth, hours worked, and overtime hours all point to some deterioration.”

“Inflation is sticky below the Fed’s target, and expectations are down, including the Michigan expectations survey which is down to an all-time low.”

The principle risks to our view, on both the upside and downside, come from the trade war. A resolution could unlock new capital spending while further escalation could tip the economy into recession.”
 


Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2019-10-23 16:45 GMT
Pair
GBP/USD
Summary
GBP/USD is consolidating Tuesday’s losses below the 1.2900 handle.  The level to beat for sellers is the 1.2815 support.
Content
  • GBP/USD is consolidating Tuesday’s losses below the 1.2900 handle. 
  • The level to beat for sellers is the 1.2815 support.
 

GBP/USD daily chart

 
 
The Pound, on the daily chart, had a spike above the main daily simple moving averages (DSMAs) while hitting levels not seen since mid-May 2019. The Brexit headlines are the main catalysts behind the GBP/USD rollercoaster. The UK Parliament rejected the PM Boris Johnson’s fast-track process for approving the Brexit deal. Elections can be next along with an extension of the Article 50.
 

GBP/USD four-hour chart

 
The Sterling is trading in a bull channel above its main SMAs. After a retracement down, the spot is challenging the 1.2900 handle. A break above 1.2908 could potentially lead to further gains towards 1.2935/50 resistance zone, according to the Technical Confluences Indicator. 
 

GBP/USD 30-minute chart

 
 
GBP/USD is trading below the main SMAs, suggesting a bearish momentum in the near term. Bears need to break the 1.2815 support to travel towards the 1.2772 price level, according to the Technical Confluences Indicator. 

  

Additional key levels

 


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.2822 S2: 1.2771 S3: 1.2681 R1: 1.2963 R2: 1.3053 R3: 1.3104
Trend Index
Recommendation : Bullish Strength : 1
OBOS Index
OBOS Index : Overbought

TIME
2019-10-23 16:42 GMT
Pair
EUR/USD
Summary
Analysts at MUFG Bank, see the EUR/USD pair trading in the 1.1050/1.1650 range, with the Euro receiving support from a Brexit deal and Federal Reserve
Content

Analysts at MUFG Bank, see the EUR/USD pair trading in the 1.1050/1.1650 range, with the Euro receiving support from a Brexit deal and Federal Reserve rate cuts. 

Key Quotes:

“The Euro has turned notably higher fuelled by developments in the two key global macro issues that have weighed on the euro this year – the US-China trade conflict and Brexit uncertainties. With the US soon entering into presidential election campaigning mode, there is building expectations of a partial deal being agreed with China at the APEC meeting in Chile on 16th-17th November. Since the sharp escalation in the US-China trade conflict in September 2018 (when the US imposed tariffs on USD 200bn worth of China imports) EUR/USD has dropped from 1.1800 to 1.0900. An easing of the conflict would likely spark some further retracement in that drop. A key resistance trend-line (Sept 2018 and June 2019 highs) comes in at 1.1200 on around 15th November – a possible key moment in the trade conflict.”

“Reinforcing the support for EUR/USD is the confirmation of the Brexit deal passing through parliament on 22nd October. This is more of a key issue for GBP but nonetheless has positive implications for the euro as well. A no-deal Brexit risk was partially priced and while now close to fully removed, there is scope for some further near-term EUR buying.”

“EUR/USD will derive support from the Fed decision next week to cut the fed funds rate for the third time. The decision is more finely balanced than the first two but we believe the lack of effort to alter market expectations of a cut prior to the start of the blackout period points to another cut being agreed. We also doubt the FOMC will be confident enough to signal firmly an end to the easing, which will likely weigh on the US dollar over the short-term.”

“We hold a bullish bias for EUR/USD given it has been some time since we’ve had a correction higher and positioning may allow for a greater short-term move higher.”
 


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.1108 S2: 1.1092 S3: 1.1067 R1: 1.1150 R2: 1.1176 R3: 1.1192
Trend Index
Recommendation : Bullish Strength : 1
OBOS Index
OBOS Index : Neutral

TIME
2019-10-23 16:21 GMT
Pair

Summary
"Eurozone confidence fell from -6.5 to -7.6, increasing concerns about industrial problems spreading to the service sector," note ING analysts. Key qu
Content

"Eurozone confidence fell from -6.5 to -7.6, increasing concerns about industrial problems spreading to the service sector," note ING analysts.

Key quotes

"Consumer confidence has been moving sideways over the course of 2019, as negative news about the economy and strength in personal financial conditions seem to have balanced each other out. The latter continues to perform well with job market strength and sluggish inflation, even though job growth has seen some levelling off in recent months and expectations for hiring are somewhat decreasing."

"Global economic conditions remain a cause for concern as the economy has slowed down substantially over the course of the year. Still, some bright signs about the growth outlook have emerged with hopes of deals between the US and China and the EU and UK increasing. Monetary stimulus is also underway, providing some cautious optimism about a possible stabilisation of growth."

"The consumer has clearly discarded this for now though, which in turn increases concerns about the outlook for the service sector. While still in line with modest consumption growth, the decline in confidence is a warning signal about the service sector performance in the months to come."


Chart

Technical Analysis
DATE: : Close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation : Strength :
OBOS Index
OBOS Index :

TIME
2019-10-23 16:15 GMT
Pair
EUR/USD
Summary

Content
  • EUR/USD is trading near three-day lows as the Greenback is progressively recovering.
  • The Brexit uncertainties are weighing on the market mood and the Fiber. 
  • The major macroeconomic news of the week is the European Central Bank (ECB) interest rate decision on Thursday.
 

EUR/USD daily chart

 
 
On the daily chart, the common currency is trading in a bear trend below its 100 and 200-day simple moving averages (DSMAs). Traders will be focusing on the key macroeconomic event of the week: the European Central Bank (ECB) interest rate decision on Thursday.
 
 

EUR/USD four-hour chart

 
The Euro, on the four-hour chart, is pulling back down from the October highs, trading below the 1.1140 level. As the market is softening, the retracement down could continue towards the 1.1090 and 1.1065 price levels, according to the Technical Confluences Indicator.
 

EUR/USD 30-minute chart

 
 
The Fiber is trading below its main SMAs on the 30-minute chart, suggesting a bearish bias in the near term. Resistance can be seen near 1.1140 and 1.1160 price levels, according to the Technical Confluences Indicator.
 

Additional key levels

 


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.1108 S2: 1.1092 S3: 1.1067 R1: 1.1150 R2: 1.1176 R3: 1.1192
Trend Index
Recommendation : Bullish Strength : 1
OBOS Index
OBOS Index : Neutral

TIME
2019-10-23 16:13 GMT
Pair
GBP/JPY
Summary
The GBP/JPY pair erased losses during the American session amid a weaker Japanese Yen across the board. An improvement in risk sentiment pushed the Ye
Content
  • Pound steady despite uncertainty around Brexit and UK politics. 
  • Yen retreats across the board as equity prices rebound. 

The GBP/JPY pair erased losses during the American session amid a weaker Japanese Yen across the board. An improvement in risk sentiment pushed the Yen to the downside, while the Pound remained unaffected by Brexit headlines. 

A steady GBP 

Concerns about how the United Kingdom (UK) will leave the European Union (EU) increased yesterday after the voting at the UK Parliament. But the slide was limited and today Pound’s performance is normal. 

Next steps in the Brexit saga, neither in UK politics are clear but so far the uncertainty affected the Pound only modestly. Reports mentioned that a new election would be the only way to break the current scenario, in the case the EU agrees to a delay until January of next years. 

Higher equity prices weight on the Yen. GBP/JPY is modestly higher for the day as it trades at 140.00, around daily highs. In Wall Street, the Dow Jones is up 0.15% while the S&P 500 gains 0.17%. US yields hold far from weekly highs but are off daily lows, adding to the negative tone around the Yen. 

Technical outlook 

The GBP/JPY holds a positive intraday tone but the momentum appears to be fading. It is testing the 140.10 area. It needs to break and hold on top to clear the way to more gains. The next resistance is seen at 140.55/60. A correction from 140.00 seems likely ahead of the Asian session. Support levels might be seen at 139.75 and 139.45. 

On a wider perspective, after the run from 130 to 140 in two weeks, the current consolidation seems expected and could continue or be followed by an extension of the correction. 

 

 


Chart
Null
Technical Analysis
DATE: 0001-01-01T00:00:00 : 0 Close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 139.06 S2: 138.47 S3: 137.44 R1: 140.68 R2: 141.71 R3: 142.29
Trend Index
Recommendation : Bullish Strength : 1
OBOS Index
OBOS Index : Overbought

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