Yesterday's trading was characterized by the strengthening of the US dollar, which was a natural reaction of the players who were awaiting the publication from the minutes of the last Fed meeting. In fact, the protocols confirmed the “hawkish” position of the regulator. Moreover, some members of the FOMC support the need to raise the rate above the neutral level.
Staying on the point of view of the further medium-term growth of the exchange rate value of the US currency, it should be noted that following the results of trading on Wednesday, there is a formation of a number of signals indicating the probability of today's local weakening of the dollar. On this basis, it can be assumed that in the first half of the day the quotes of the EUR/USD and GBP/USD currency pairs will push up from the morning values and show an increase to the area of their moving averages. Towards evening, with the opening of the American trading, the resumption of negative dynamics is not excluded.
From the data published today, we can note weak statistics on retail sales in the UK. The September value in monthly terms was -0.8%, which is the lowest since April of the current year. It may be recalled that it was from the middle of this month that a significant strengthening of the US currency was observed in the markets. In addition, today the attention of participants will be drawn to the news from the Summit of EU leaders, which will be another attempt to reach a compromise in the negotiation process on Brexit.
In the afternoon, it is published a block of statistics on the US labor market. Strong data are expected to be released, which will contribute to another wave of growth in the exchange rate value of the dollar.
EUR/USD
The set of signals of technical analysis, indicating the probability of negative dynamics of quotations of the pair EUR/USD, was realized at yesterday's trading by lowering prices in the upper boundary of the medium-term downward channel near the mark of 1.1490. On Thursday morning, the pair stabilized in the specified area. Moreover, a local signal has been generated to stop the decline in quotations and start a corrective upward movement. The convergence between the minimum prices and the corresponding values of the MACD indicator indicates the possibility of price growth to the area of 1.1545-1.15555 through which the 200-periodic MA passes on the H1 time frame.
In the afternoon, with the opening of the American session, the resumption of negative dynamics is not excluded.
Areas of support and resistance are areas 1.1480-1.1490 and 1.1535-1.1550, respectively.
GBP/USD
On the chart, the GBP/USD pair as a result of yesterday's decline in quotations below the minimum values of Monday morning, when trading after the weekend opened with a gap against the background of an unsuccessful Sunday attempt to achieve progress on the Brexit issue, a convergence between local minima and the corresponding RSI and MACD values was formed. This fact leads to the conclusion about the probability of the growth movement of quotations in order to reach the area of 1.3140-1.3150. Published in the middle of the day, weak statistics on retail sales in the UK was ignored by the market, as the main attention is focused on reports related to the passing Summit of EU leaders.
Closer to the end of trading is expected to return quotes to the area below 1.3100.
The support zone today is in the area of 1.3080-1.3090 (green oval).
The resistance zone is present in the range 1.3140-1.3150 (red oval).
USD/JPY will spend most of the day near its moving average around 112.50.
In the late afternoon, quotes may resume the upward movement observed since October 15, which will reflect the general strengthening of the US currency in world markets. The purpose of the increase will be the resistance zone, located near the mark of 113.00.
The support zone is the range of 112.45-112.55 (green oval).
The resistance zone is located in the area of 112.90-113.05 (red oval).
On the night of Wednesday to Thursday, from a technical point of view, a local correction signal was formed on the USD/CHF chart. The divergence between the maximum prices and the corresponding values of the MACD indicator was recorded, which indicates the probability of a decrease in quotations to the 200-periodic MA area on the H1 time frame, which passes through the 0.9900 mark.
After that, the next trading session is expected to resume the positive dynamics of prices as a result of the expected strengthening of the US currency.
The support zone is located at 0.9900-0.9910 (green oval).
Resistance is present in the range 0.9945-0.9955 (red oval).
