Daily Market Outlook: Euro Under Pressure

EURUSD

The Euro came under increased pressure, with yesterday’s acceleration lower, erasing most of gains from 1.2603 low to 1.2765, where rally stalled, short of key 1.2790 peak. Negative tone has established on hourly studies and keeps focus at the floor of larger range at 1.2603. With 4-hour indicators turning lower, immediate risk is seen on a break below 1.26 handle, also near Fibonacci 61.8% retracement of 1.2499/1.2790 upleg, which would confirm failure swing formation and look for further retracement of 1.2499/1.2790 corrective rally. Yesterday’s close in red and below daily 20SMA, supports near-term negative stance, which requires clear break below 1.2603 support, to confirm an end of near-term directionless mode and bring bears fully in play. Strong support lies at 1.2603, loss of which to open 1.2567, low of 30 Sep and Fibonacci 76.4% retracement of 1.2499/1.2790 rally, the last significant obstacle towards key near-term support at 1.2599, 03 Oct low.

Res: 1.2678; 1.2700; 1.2730; 1.2766
Sup: 1.2610; 1.2603; 1.2567; 1.2499




EURJPY

The pair remains under pressure and eventually tested psychological 135 support, on a probe below weekly cloud base at 135.30. Bearish tone prevails on all timeframes and sees risk of further extension of the downleg from 141.20, 19 Sep lower top, on a break below 135 handle, as previous base at 135.80/71, has been taken out. On the other side, yesterday’s Outside Day candle warns of possible reversal, which requires daily close above 135.50, yesterday’s high and 50% of 137.92/135.02 downleg, to be confirmed.

Res: 136.13; 136.53; 136.81; 137.03
Sup: 135.15; 135.02; 134.50; 134.00




GBPUSD

Cable maintains negative tone and probes below psychological 1.59 support, where the downmove met its 100% Fibonacci expansion of the third wave from 1.6125 lower top. Yesterday’s close in long red candle and completion of 1.5950/1.6225 corrective rally, confirms bears are fully in play for further extension of the downtrend from 1.7189, 13 July peak. Sustained break below 1.59 handle to open 1.5853, Nov 2013 low, with the wave capable of travelling to 1.5823, its 138.2% Fibonacci expansion and double Fibonacci support at 1.5720, 161.8% expansion and 61.8% retracement of larger uptrend from 1.4812 to 1.7189. Previous lows at 1.5950 and 1.6000, offer initial resistances, with stronger rallies expected to be capped under 1.61 barrier, Fibonacci 61.8% of 1.6225/1.5875 downleg.

Res: 1.5950; 1.6000; 1.6050; 1.6100
Sup: 1.5875; 1.5853; 1.5823; 1.5800




USDJPY

The pair consolidates above fresh and marginally lower low at 106.65, posted yesterday, where descend met its 38.2% retracement of larger 101.07/110.07 ascend. Consolidative action is under way and faces the first resistance at 107.50 zone, while break above the significant barrier at 108 zone, also near Fibonacci 61.8% of 108.73/106.65 downleg, would sideline bears and signal basing attempt. Hourly studies turned positive, while yesterday’s positive close turned daily indicators towards the upside, which supports near-term action higher, with clearance of initial 107.50 barrier, required to signal stronger recovery and open 108.00/15 breakpoint zone.

Res: 107.56; 107.94; 108.15; 108.31
Sup: 107.00; 106.83; 106.65; 106.00



AUDUSD

The pair remains in directionless mode, with near-term price action being entrenched within 0.8641/0.8896 range. The tone of near-term studies is neutral and requires break of either side to establish fresh direction. On the other side, overall bearish trend sees current consolidation preceding fresh leg lower, as a part of larger downtrend from 2011 peak at 1.1079. Yesterday’s failure to sustain break above psychological 0.88 barrier, also Fibonacci 61.8% of 0.8896/0.8650 downleg, keeps the price action in the lower part of the range.

Res: 0.8785; 0.8812; 0.8832; 0.8896
Sup: 0.8700; 0.8673; 0.8650; 0.8641




AUD/NZD

Repeated Doji candle shows near-term indecision, with near-term consolidation under way and following unsuccessful attempt below strong 1.11 support, also daily 20SMA. Mixed near-term studies, show lack of direction. On the other side, daily indicators still hold in the positive territory, which keeps alive hopes of higher low formation and fresh attempt towards pivotal 1.1280/93 peaks, with daily 55SMA protecting the downside for now. Extension above minimum 1.1170, 50% of 1.1276/1.1061 descend, is required to confirm scenario and sideline fresh attempts through 1.1100/1.1061 levels, below which to confirm near-term double-top and open way for further retracement of 1.0914/1.1279 ascend.

Res: 1.1174; 1.1200; 1.1255; 1.1276
Sup: 1.1100; 1.1061; 1.1053; 1.1000




XAUUSD

Spot Gold enters near-term corrective phase, after failing to regain initial 1240 barrier, above which Fibonacci 38.2% target at 1244 was expected to come in focus. Instead, the price probed below initial support at 1225, 13 Oct intraday low and 23.6% of 1182/1237 ascend. Near-term focus is shifted towards the downside and looks for extension to the next significant level at 1216, 10 Oct higher low / Fibonacci 38.2% of 1182/1237 ascend / daily 20SMA. Break below the latter would confirm lower top formation and risk further downside, as overall picture remains bearish. On the other side, positive tone still exists on 4-hour studies and would keep potential upside attempts in play, while 1216 support holds.

Res: 1230; 1237; 1240; 1244
Sup: 1220; 1216; 1210; 1204