The press conference by the head of the European Central Bank, Mario Draghi, has given new impetus to the strengthening of the US dollar. Quotes of EUR/USD and GBP/USD have updated the minimum values for the last few weeks. At the same time, the USD/CHF pair reached parity, and the USD/CAD pair not only recovered losses after the decision of the Bank of Canada to raise the interest rate, but also reached the level of 1.3138, near which there is a strong resistance zone. Gold continues to make wide fluctuations in the range of 1229.00-1238.00, remaining inside the growing side range, trying to break through its upper limit and rush, if successful, to the mark of 1250.00, where the medium-term increase target is located.
The main points of the speech by Mario Draghi were the confirmation of plans to close the QE program at the end of 2018 and the non-participation of the regulator in the issue related to the approval of the Italian budget.The main reason that led to the strengthening of the US currency was precisely the last thesis, since removing the regulator from this problem means a possible further escalation of the confrontation between Rome and Brussels, which reduces the appetite for risk.
Today, the main event is the publication of data on US GDP for the 3rd quarter. The players’ expectations are at the level of 3.3% (q / q), which is inferior to the value of the indicator in the previous quarter, however, it is at a fairly high level. After the release of these statistics on the market can be observed significant price movements. From my point of view, the incessant strengthening of the US dollar, accompanied by the formation of a significant number of corrective signals, as repeatedly mentioned in previous overviews, could turn into a sharp bounce of quotes in the last regular trading, which will allow players to take profits from the previous decline. Until the moment of publication, the trade is predicted rather sluggish. It will be interesting to observe the dynamics of quotations at the opening of the American regular trading, when the answer to the question about the possibility of joining American players to take profits will become clear.
By Friday morning, the EUR/USD quotes reached the area of 1.1370-1.1380, which is not much higher than the minimum values of the current year, observed in mid-August. The negative dynamics was the result of the speech of the ECB President Mario Draghi, who noted the risks to the European economy, one of which is the problem of the Italian budget. Despite the confirmation by the controller of the intention to curtail the program of quantitative easing at the end of 2018, the markets continued the trend of strengthening of the US dollar. At the same time, similar to the situation of the previous days, the technical pattern of trading is characterized by the preservation of corrective signals. Such a discrepancy between the technical picture and the dynamics of quotations cannot last for a long time: either a corrective bounce will occur on the market or signals that are called “break”. But they stil hold on. Fracture of price movement may occur after the publication of data on US GDP for the 3rd quarter. Players can start profit taking at the end of the week.
Support and resistance zones today are in areas 1.1360-1.1380 and 1.1500-1.1515, respectively.
The dynamics of quotations of the pair GBP/USD fully repeats the dynamics of the pair EUR/USD. Strengthening the US currency in world markets led prices to around 1.2800. The reason for the negative trend is the same – the speech of Mario Draghi. At the same time, unlike the European currency, the British pound is under pressure from the Brexit problem. The parties can not come to a compromise solution about the Irish border. From a technical point of view, the convergence between local minima and the corresponding values of the MACD indicator continues to persist on the chart, which leaves the possibility of realizing a corrective price rebound.
The support zone is in the area of 1.2800-1.2815 (green oval).
Resistance zone is present in the range 1.2960-1.2975 (red oval)
Today, the main struggle in the USD/JPY pair trading will unfold around the 112.00 mark. After reaching the area of 200-periodic MA on Thursday, the quotes dropped to this level by the morning of today, which is a consequence of the nervous situation in the world stock marketsFrom the technical point of view, no new signals have been recorded, which leads to the conclusion about the predominance of neutral dynamics. At the same time, in the second half of the day, the probabilitz of more attempts to break through support around 112.00 is not excluded, which will be a consequence of the predicted local weakening of the US dollar when players take profits.
The support area today is the range 111.95-112.00 (green oval).
The zone of resistance is located in the region 112.40-112.50 (red oval).
On Thursday, the USD/CHF pair reached parity, which contradicts the decline in prices we are predicting, according to technical analysis signals. However, despite the growth of quotations, the signals on the chart remain, which increases the probability of a corrective rebound. In the case of our prediction, the goal of reducing remains the range of 0.9850-0.9860, where the 200-period MA is located on the H4 time frame.
Support and resistance zones are located in areas of 0.9855-0.9875 (green oval) and 0.9990-1.0000 (red oval), respectively.
The growth of the American currency, due to a number of fundamental factors and an increase in nervousness on global stock markets, led not only to the losses after the decision of the Bank of Canada on the interest rate, but also to rise to the resistance zone located in the area of 1.3135-1.3150. This zone is the upper boundary of the multi-year triangle, which began in January 2016. This circumstance suggests a stabilization of quotations and a corrective decline in prices to support located in the 1.3100 area, where the pair was trading for several days on the eve of the Canadian regulator meeting.
The support zone is in the range 1.3090-1.3100 (green oval).
Resistance is located at 1.3135-1.3150 (red oval).
Today, the chart of gold quotes is presented on a larger time frame H1. The graph shows that after a sharp rise on October 11, the instrument is trading from a rising channel, the upper and lower limits of which are now located around the marks of 1229.00 and 1240.00, respectively. Predicted continuation of oscillations within this channel. As noted in yesterday’s review, the mid-term goal of increasing quotes is at around 1250.00. It is possible that the implementation of this scenario will occur when the predicted correction movement in the markets occurs.
The support zone today is located in the area of 1229.00-1229.60 (green oval).
Resistance is in the range of 1239.50-1240.00 (red oval).