Weekly Technical Analysis For November 5th to 9th, 2018

Next Up, FOMC Meeting and US Midterm Elections: What To Expect From The FED

EUR/USD:

The US Dollar showed an upward movement against major currencies last Friday after the US job creation came out better than the market’s consensus in October. US Non-Farm Payrolls printed at 250k, well above 194k eyed. While the unemployment rate was unchanged at the 49-year low of 3.7%. Additionally, the average hourly earnings rose 0.2% m/m, as expected. The upbeat US data indicating the tightening cycle by the Federal Reserve will continue.

In the upcoming week, we will focus on the Fed Rate Decision, US PPI Inflation, and the US Midterm Elections. According to the latest surveys, the polls suggest the Democratic Party will win control of the House of Representatives, but Republicans are favored to retain control of the Senate.

The Fed is scheduled to hold its policy meeting on Thursday. There is no rate change expected from the Fed, however, traders expect to see a rate hike in December. If the Federal Reserve projects a more aggressive interest rate hike, the greenback would rise sharply.

Moreover, US Producer Price Inflation Data will be published on Friday. October's PPI is expected to come out at 2.6%, the same as the previous number.  However, the Core PPI inflation is expected to ease to 2.3% from 2.5%. 

The EURUSD pair found sellers from the 1.1446 resistance and then dropped to the daily support level of 1.1367. However, as long as the price stays above 1.1367, on a daily basis, the fall may be limited and we will face resistance level at 1.1446 again. On the other hand, if the pair breaks down 1.1367, the next support level is holding at 1.1262.

Support: 1.1367 - 1.1262 - 1.1188

Resistance:  1.1446 – 1.1531 - 1.1607

GBP/USD:

The Bank of England left the bank rate unchanged at 0.75% last Thursday. However, the BoE signaled more interest rate hikes could be in the cards if Britain's exit from the European Union is smooth.

Looking ahead, the UK economic growth will be announced on Friday. The UK GDP is expected to come out at 1.5% which is higher than the initial estimate of 1.2%. A higher than expected reading should be taken as positive for the Sterling.

The GBPUSD pair showed bullish action and then closed last week above the daily support level of 1.2961. As long as the pair stays above 1.2961 on a daily basis, the upward movement may continue. At this point, we will see 1.3050 and 1.3152 as resistance levels. On the other hand, if the price pulled back below 1.2961, the support level can be found at 1.2844.

Support: 1.2961 - 1.2844 - 1.2712

Resistance:1.3050 - 1.3152 - 1.3241

USD/JPY:

We will focus on the 113.63 key resistance level in the USDJPY pair this week. In order for the rise to gain more momentum, it needs to go beyond and stay above 113.63 on a four hourly basis. At this point, we will see 114.63 as the next resistance level. Otherwise, the rise may be limited and we will face the support level at 112.46 and 111.66 again.

Support: 112.46 - 111.66 - 110.86

Resistance: 113.63 – 114.63 - 115.61

GOLD:

The Gold price jumped up from the 1214 key support level and closed last week below the 1235 major resistance level. In order for the bullish action to improve, it needs to break out and stay above 1235 on a four hourly basis. Should this occur, the next daily resistance level can be found at 1243. Otherwise, we might see a taking profit action and the support levels will be at 1225.

Support: 1225 - 1214 - 1207

Resistance: 1235 - 1243 - 1256

04 Nov 18 (Sun)

07:47 pm


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