Forex Update – 6 Nov 2019

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By: Ahura Chalki

Steady Markets await trade signals!

New Zealand:

The first news of the day was about the Unemployment Rate in the South Pacific nation, which disappointed the market by rising to 4.2%, from the previous 3.9 and 4.1% of forecasts, with Employment change decreasing by 0.2% from 0.3% forecast, pressures on RBN for another rate cut.

Japan:

A decline in service PMI to 49.7 from 52.8 while in Monetary Policy Meeting we did not have any surprise to be effected in the market.

EU:

Euro-zone Markit’s PMI and Service PMI from Italy and Germany were better than expectation, while Service PMI of France met the estimated numbers and Spanish Service PMI declined to 52.7 from October from the previous 53.3 in September. Later today Euro-zone retail sales will be in the spotlight. Generally, the environment for Euro is positive for now.

US:

Today Nonfarm Productivity (Q3) and Unit Labor Costs (Q3) are the most important data in the US market in a light economic calendar. So far DXY has side movement in the Euro season as well as its side movement in the Asian season after yesterday’s mixed data from the US economy. The gains of ISM Non-Manufacturing Purchasing Managers’ Index, which beat expectations with 54.7 points followed by a decline in the labor market with negative JOLTs Job Openings (Sep).

Trade Talks:

While getting closer to the final signature of phase-one of the trade deal, the agreement can still fall apart as China with insistence asking to remove the older tariffs as well as the most recent ones imposed in September.

 

EURUSD

S1

S2

S3

R1

R2

R3

1.1043

1.1015

1.0966

1.1120

1.1169

1.1197

 

Breaking the Key support of the day before at 1.11138 confirmed the downtrend, as we were expecting yesterday. For now, this level is changed to the immediate and key resistance level, trading under this remains of more bearish. In the H1 chart, technical indicators remain of side movement with bullish interest, while EMA crossing strategy in both H1 and H4 charts supports the bears.

EURGBP

S1

S2

S3

R1

R2

R3

0.8570

0.8547

0.8510

0.8630

0.8667

0.8690

 

RSI returned back above 50-level in the H1 chart as well. While candles are closing above EMA 20, Stochastic also supports the bulls at the H1 and H4 charts. Pairing could pass the first resistance at 0.86051, steady trading above this level can return the movement to uptrend while crossing the level will change, however ahead of tomorrow BoE, side movement is more likely for now.

 

EURJPY

S1

S2

S3

R1

R2

R3

120.61

120.34

119.99

121.23

121.58

121.84

 

Trading under 50% of Fibonacci, while twice has been trying to pass the 38.2% of Fibo level. 121.00 is the key resistance level, which sits on 61.78% of Fibo as well. Passing this level can lead the market ahead while trading under 121.00 supporting the bears. On the other hand, 120.726 is a key resistance level as well as 38.2% Fibo, breaking this level can open the doors for more bears.

USDJPY

S1

S2

S3

R1

R2

R3

108.70

108.22

107.94

109.46

109.74

110.22

 

After testing one week high ta 109.239, strong recovery started right after that. Parabolic SAR has a clear downtrend signal in the H1 chart, while CCI moves under -100 level. However, RSI cannot confirm the downtrend, yet, as it moves in the natural zone in the H1 chart and above 50-level in the H4 chart. 109.060 is the immediate resistance and EMA20, at the H1 chart, returning above this level and holding there, will confirm the continuing of an uptrend movement, however breaking the S1 at 108.70, will confirm the future downtrend. As DXY has been started its correction from earlier today, the downside for pairing is more likely.

GBPUSD

S1

S2

S3

R1

R2

R3

1.2858

1.2829

1.2799

1.2917

1.2947

1.2975

 

Cable, ahead of tomorrow’s BoE Interest Rate Decision moves steady, as there is not enough economic data to confirm the direction for now. The paring moves between BB bands, with no confirmation of down or uptrend. RSI moves at 50-level as well. Side movement is confirming in the H4 chart as well.


Risk Warning: Trading-Leveraged Products such as Forex and Derivatives may not be suitable for all investors as they carry a high degree of risk to your capital. Please ensure that you fully understand the risks involved, taking into account your investment objectives and level of experience, before trading, and if necessary, seek independent advice.

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