The UK Prime Minister Boris Johnson is reportedly going to speak with the president of the European Council to reiterate his message that Britain will be working constructively and at pace as there’s not much time before the UK leaves the European Union. At the same time Frost, Britain’s EU negotiator warns that the parties are some way away from the deal. This back and forth has created uncertainty but also some hope which is reflected in the GBPUSD as ranging price action. We will take a look at the price action below. By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.

GBPUSD has failed twice to penetrate the 1.30 resistance since our analysis on September 11th in which we said that we don’t believe the pair will move past this important level. Now Cable seems like it might make yet another attempt on the level. While a resistance level is a resistance level until it’s broken (and its role reversed) the series of higher lows and higher highs begs the question whether the pair is actually building momentum to break above the level.

The nearest resistance area now is 1.2989 – 1.3027 (38.2% Fibonacci retracement, recent highs and current channel high) while the nearest support is at 1.2845 (today’s low). Break above the resistance area makes the next key levels probable targets and a break outside the rising channel and a violation of the 2845 support suggests a move to 1.2780 is likely. For more analysis on this and other markets, go to tiomarkets.com/analysis and subscribe to TIOmarkets YouTube channel. You can also join our TIOmarkets Announcements Telegram channel to get timely alerts when we publish a new analysis.

EURUSD has been creating higher lows and higher highs which obviously is the definition of an uptrend. Now the pair is moving sideways right below a previous high. Should the pair manage to push higher and create a new higher high the 1.1860 – 1.1872 range could come into play. (61.8% Fibonacci level and September 21st reactionary high). A decisive break below 1.1758 would make the current consolidation a lower high and therefore indicate weakness.

We said yesterday that if the POTUS doesn’t change his mind about abandoning the (stimulus) negotiations it’s probable that weakness in the AUDUSD continues and that we look for sell signals below 0.7155. The market provided us with a quick move lower but then buying started before our T2 was hit. Now there have been rumours of a piece-meal stimulus deal which has softened the bid for the USD and the pair is now trading above 0.7155. The long-term technical picture is still bearish as the pair trades below 0.72 and another lower reactionary high below this level would indicate bearishness to continue. Key resistance areas are around 50% and 61.8% Fibonacci levels where we have first a descending trendline resistance (near 50% retracement level) and the double top highs (near 61.8% retracement level). Nearest supports are at 0.7123 and 0.7095.

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Selling in gold was a bit indecisive yesterday the price managed to create a higher low in 4h chart which has now together with the publication of the FOMC meeting minutes translated into buying that attempts to challenge yesterday’s high. The next resistance area after yesterday’s high (1898) is around the 50% retracement level and supports are at 1878 and 1872.

Recent macroeconomic data releases

  • Canada Manufacturing PMI, 56
  • US ISM Manufacturing PMI, 55.4, 56 expected
  • US Average Hourly Earnings, 0.1%, 0.5% expected
  • US Non-Farm Employment Change, 661K, 900K expected
  • US Unemployment rate, 7.9%, 8.2% expected
  • Australia NAB Business Confidence, -4, -8 previous
  • EU Retail Sales,4.4%, 2.4% expected
  • US ISM Non-Manufacturing PMI, 57.8, 56.3 expected
  • Australian Cash Rate, 0.25%, 0.25% expected
  • Canadian Trade Balance, -2.4B, -2.1B expected
  • FOMC Meeting Minutes

Macroeconomic data releases today

  • BOE Gov Bailey Speaks
  • BOC Gov Macklem Speaks
  • US Unemployment Claims, 820K expected
  • RBA Financial Stability Review

You may access the times and dates in the economic calendar here.

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Janne Muta
Chief Market Analyst
TIOmarkets.com

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Janne Muta
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