Below you will find technical analysis of the top forex pairs, commodities, stocks and indices to watch in today’s trading.
Due to the continuing fiscal uncertainty caused by the U.S. government, the EUR/USD strengthened to the 1.3560 level on Friday. Today is the last remaining day for the congress to approve a higher budget; otherwise the government will be led to, at least a partial shutdown. However, as the U.S. session started the pair reversed down and finished around the 1.3520 area. This week the Euro started with weakening due to the appearance of the Italian political crisis. Moreover, the German Retail Sales came out worse-than-expected (0.5% instead of 0.9%). The Euro will be also influenced by the CPI Flash Estimate, which will be released at 9.00AM (GMT). This result usually comes out the same as the prediction so no higher volatility is expected. At 1.45PM (GMT) the Chicago PMI will be posted. The prediction is 54.5 and if the data shows at least 55.0 or more, then the pair might be pushed below the 1.3460 level. The trend is slightly bearish with support at 1.3455 and resistance at 1.3570.
Trend: Slightly Down
The GBP/USD pair continues its movement up after experiencing a slight drop. The current price of GBP/USD is actually the maximum it has been for the past 9 months. The increase in the price is supported by strong U.K. data and mixed sentiment on the U.S. market. The U.S. Dollar weakened a week ago after the Fed decided not to scale back its monetary stimulus and during last week we hear several speeches of FOMC members where e.g. Charles Evans said that there is decent chance that the cuts will start in November/December, but most probably this will only happen in the beginning of next year. Today, the British pound will suffer on account of the political crisis in Italy and might erase some of its earlier profits. At 8.00AM (GMT) the U.K. Net Lending to Individuals will be announced. Traders should also watch the U.S. Chicago PMI at 1.45PM (GMT). The trend is slightly bearish but might reverse on the weaker U.S Dollar with support at 1.6020 and resistance at 1. 6195.
Trend: Down – Up
The USD/JPY touched its lowest price in September, due to fact that the U.S. government is on the edge of shutdown. Investors have their hopes on a last minute deal being reached, but it is doubtful whether House Republican leaders will condone to passing a bill that only extends federal spending. If a deal is not reached and the government is forced to shutdown, it will be the first time that this has happened in 17 years. Because of this debacle, the USD/JPY started the week below 97.80 and during the Asian session it recovered only slightly to 98.00, as the Japanese Retail Sales and Housing data reflected disappointing results. The pair remains on a negative momentum and we should expect another decrease. The support is placed at 97.65 and resistance at 98.85.
Trend: Slightly Down
As would be expected, Gold is actually benefiting from the uncertainty over the U.S. government budget and during Friday’s hours it added more than $10/ounce and finished on $1,337/ounce. As the chance of the US government shutdown increased, gold touched the price of $1,350/ounce. This higher volatility appeared just within the first minutes of the Asian markets opening, but later on the price settled on the 1,339 area. It is definitely a short-term phenomenon. OCBC Bank analyst Gan said that the sentiment towards gold is still expected to be bearish for the full year. The sentiment now remains slightly bearish but might change if the US Congress agrees on a stop-gap spending bill. The support is lying at 1,320 and the resistance is lying at 1,352.
Trend: Slightly Up