Weekly Technical Analysis For October 14th to 18th, 2019

Pay Attention To US Retail Sales And Eurozone CPI Inflation This Week

EUR/USD:

The US Dollar fell versus the Euro last week after US Consumer Prices rose less than expected in September, increasing the chances of the Federal Reserve cutting rates before the end of the year.

The US Consumer Price Index stayed unchanged at 1.7% on a yearly basis to miss the market expectation of 1.8%. The core CPI, which excludes volatile food and energy prices, also remained steady at 2.4% in the same period to match estimates.

We got positive comments from U.S. President Donald Trump on trade talks helped boost sentiment. Last Friday, U.S. President Trump announced a “Phase 1 Deal” with China. China agreed to purchase $40-$50B in agricultural goods and October 15 tariffs delayed, but there’s nothing about intellectual property.  As US-China Trade Negotiations continue, we will be watching the headlines closely to see if the trade truce stays but for the time being, the phase 1 deal eliminates near-term risks for China.

Looking ahead, focus on US Retail Sales figures. The Commerce Department will report September retail sales numbers on Wednesday. Economists predict that retail sales rose 0.3% last month. On the other hand, Core retail sales, which exclude autos, are expected to have risen by 0.2%. A higher than expected reading should be taken as positive for the greenback.

In addition to Retail Sales, keep your eye on Building Permits, NY Empire and Philadelphia Fed Manufacturing Index in the US.

If we look at Eurozone Area; watch out for the Consumer Price Index. On the year-on-year basis, the Eurozone CPI is expected to ease to 0.9% from 1.0%. 

The EURUSD pair moved up and reached the daily resistance level of 1.1052 last week. In order for the upward movement to continue, it needs to go beyond and stay above 1.1052 on a daily basis. At this point, we will see 1.1114 as the next resistance level. Otherwise, the rise may be limited and we will follow support levels at 1.1007 and 1.0965. 
 
Support:  1.1007 - 1.0965 - 1.0930

Resistance: 1.1052 - 1.1114 - 1.1165

GBP/USD:

The Sterling surged last week on signs of meaningful progress on Brexit after Irish Prime Minister Leo Varadkar confirmed that a deal could likely be reached by Oct. 31, when the U.K. is expected to leave the European Union.

In the upcoming week, the UK CPI Inflation will be important release for the Sterling. The UK CPI inflation is expected to rise to 1.8% from 1.7% year-on-year.

Moreover, the UK Office for National Statistics will publish the monthly jobs report on Tuesday and it will be watched more for what it says about wages than hiring. The UK Unemployment Rate is expected to stay at 3.8%.

The GBPUSD pair found buyers from the daily support level of 1.2205 and then hit the 1.2671 major resistance level last week. In order for the bullish action to continue, it needs to rise and stay above 1.2671 on a daily basis. Should this occur, we will watch the next resistance level at 1.2768. Otherwise, we will see the support level at 1.2572. 

Support : 1.2572 - 1.2502 - 1.2428

Resistance: 1.2671 - 1.2768 - 1.2838

USD/JPY:

USDJPY pair showed an upward movement last week. We will closely watch the 108.52 daily resistance level. In order for the rise to gain more power, it needs to stay above 108.52 on a daily basis. At this point, we will face 108.79 as the next resistance level. In contrast, we will face the support levels at 108.14 and 107.82

Support : 108.14 - 107.82 - 107.52

Resistance: 108.52 - 108.79

GOLD:

The Gold Price jumped up above the main level of 1478. If the price stays above 1478, on a four hourly basis, we will see the daily resistance level at 1492. On the downside, if the price moves down below 1478, the next support level will be at 1466.

Support: 1478 - 1453 - 1440

Resistance: 1492 - 1509 - 1524

13 Oct 19 (Sun)

06:40 pm


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