Weekly Technical Analysis For October 11th to 15h, 2021

A Busy Week For Trading; Focus On US CPI Inflation And FOMC Minutes.

EUR/USD: Last week, Nonfarm Payrolls (NFP) in the US rose by 194K in September. This reading missed the market expectation of 500K by a wide margin. On a positive note, the August print of 235K got revised higher to 366K.

Further details of the publication revealed that the Unemployment Rate declined to 4.8% from 5.2% in August, compared to analysts' estimate of 5.1%. Additionally, the Labor Force Participation Rate edged lower to 61.6% from 61.7%, and the wage inflation, as measure by the Average Hourly Earnings, rose 4.6% on a yearly basis as expected.

The US dollar stayed strong last week, as a surge in energy prices raised the risk that the U.S. Federal Reserve would act sooner to normalize policy.

Looking ahead, the U.S. consumer price index will release Wednesday.

Consumer prices are expected to have risen 0.3% last month and 5.3% over the prior year, according to estimates. Excluding the cost of food and fuel, core inflation is projected to be 4.0% on a year-over-year basis.

In the upcoming week, the minutes of the FOMC meeting due Wednesday is expected to provide investors with an insight into the Fed’s thinking on monetary policy.

In the last meeting, the Federal Reserve said it will likely begin reducing its monthly bond purchases as soon as November and signaled interest rate increases may follow more quickly than expected as the U.S. central bank turn from pandemic crisis policies gains momentum

FOCM Meeting showed that maintaining bond buying of $120 billion per month. Inflation levels are elevated on transitory factors. The economy has made progress toward the tapering threshold. Raised individual counterparty reverse repo limit to $160 billion from $80 billion.

Moreover, focus on US PPI inflation data on Thursday. Economists predict that PPI rose by 0.6% last month. On the other hand, Core PPI is expected to have increased by 0.5%.

The EURUSD pair dropped below the 1.1589 main resistance level. As long as the EURUSD pair stays below 1.1589, on a four-hourly basis, we will follow 1.1507 as the support level. On the upside, if the price rises above 1.1589, the next resistance level will be at 1.1658.

Support: 1.1507– 1.1421 -1.1365

Resistance: 1.1589 – 1.1658– 1.1744

GBP/USD: Pay Attention to the 1.3599 key support level in the GBPUSD pair. As long as the pair stays above 1.3599, on a daily basis, we will follow the 1.3688 resistance level. Otherwise, if the price drops below 1.3599, the next resistance level will be at 1.3517.

Support: 1.3599 - 1.3517 - 1.3392

Resistance: 1.3688 - 1.3784 - 1.3883 

USD/JPY: The USDJPY pair rose above the 112.16 main support level. As long as the price stays above 112.16 on a daily basis, we will face 112.59 as the main resistance level. Otherwise, if the price drops below 112.16, we will follow the next support level at 111.52.

Support : 112.16 - 111.52 - 110.93

Resistance: 112.59 - 112.89

GOLD: The GOLD price closed last week below the 1763 key resistance level. As long as the price stays below 1763, on a four-hourly basis, we will see the daily support level at 1745. On the upside, if the price moves up above 1763, the next support level will be at 1785.

Support: 1745 - 1736 -1722

Resistance: 1763 - 1785 - 1805

10 Oct 21 (Sun)

08:05 pm


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