Chart of the Day

[Mysticforex 13]

Having broken below 1.30, the next area of support for EUR/USD is between the 2013 low of 1.2746 and the 23.6% Fibonacci retracement of the 2011 to 2012 decline near 1.2730. If this zone is broken, then there is no major support until 1.25. Today’s high of 1.3155 is the resistance.

[Mysticforex 13]

Taking a look at the monthly chart of USD/JPY the currency pair has broken above the 61.8% Fibonnaci retracement of the 2007 to 2011 decline and at this stage there is no major resistance until 110. As long as USD/JPY remains above 104, the uptrend is intact.

[Mysticforex 13]

Breaking 92 cents is extremely important for the Australian dollar but as you can see from the chart, the main resistance level for the pair is closer to 0.9150, the 32.8% Fibonacci retracement of the 2008 to 2011 rally. If NZD/USD closes below this level in a meaningful way, is next target should be 90 cents. On the other hand, AUD/USD needs to recapture 0.9250 to negate the downtrend.

[Mysticforex 13]

After making a quadruple bottom at 136.00 level and now breaking above the 138.00 figure the EUR/JPY looks ready to make an assault on the 140.00 level. A break above there opens up the prospect of further move to 142.00. Meanwhile only a break of 136.00 would resume the bearish bias.

[Mysticforex 13]

As shown in the monthly chart, the EUR/USD found support at a fairly important technical level, the 23.6% Fibonacci retracement of the 2008 to 2010 decline. If this level is broken, the next area of support will be the 2013 low of 1.2750. On the upside, if EUR/USD breaks above 1.30, there is no major resistance until 1.3150.

[Mysticforex 13]

After 5 straight days of selling the Aussie has finally had a positive day as the key 9000 level provided a modicum of support. The pair needs to hold above 8950 in order to show some signs of a bottom and could then rally towards 9200. A break below 8950 invites a test of the swing lows at the 8750 level.

[Mysticforex 13]

GBP/AUD appears to have topped out at the 1.8000 level and the pair now looks headed lower with 1.7500 the first level for shorts. A move below could target the recent lows at 1.7200 while only a move back above the 1.8000 figure relieves the bearish bias in the pair.

[Mysticforex 13]

Technically USD/JPY has made fresh highs and see no significant resistance until the 110.00 level back from 2008. A break above 109.00 opens the run to that barrier while a move below 107.50 could trigger a selloff to 107.00

[Mysticforex 13]

Scotland is voting for independence today and we should have the results at the end of Asian session trade. For now the market is convinced that Scotland will vote No but with polls relatively close and turnout very high anything is possible. If the No vote takes place then the pound may get a knee jerk bounce but with so much information already priced in the prospect of much more upside is limited and the pair is likely to see resistance at the 1.6500 level. On the other hand a Yes would be a shocker that will likely drive pound through the 1.6000 level very quickly as it will open up a very nasty can of worms for not only UK but for the rest of Europe as well. At very least this will greatly delay any rate hiking from the BoE andcould have long term negative ramifications for UK economy and sterling.

 

Technically pound sees strong resistance at the 1.6500 level while the recent swing low of 1.6050 represents support. A break below opens up the prospect of a move to 1.5900 as all key support level get taken out.

[Mysticforex 13]

Technically EUR/AUD faces resistance at the 1.4600 level but a break there could open a run all the way to 1.4800. On the other hand only a break below 1.4200 puts the negative bias back in play as for the time being the pair remains in the Bollinger band buy zone.

[Mysticforex 13]

Technically EUR/NZD faces key resistance at 1.6000 but a break there opens up the run towards 1.6200 and possibly even 1.6500 on a longer time horizon. Meanwhile a break below 1.5800 turns the bias on the pair bearish again.

[Mysticforex 13]

Now that the threat of Scottish independence is over, cable traders can once again focus on fundamentals. Unfortunately there is not much UK data on the docket this week, but tomorrow could prove to be highly volatile when BOE Governor gives a speech in Wales. The speech, to be delivered at the Institute and Faculty of Actuaries General Insurance Conference's meeting, is closely watched for any clues on the timing of U.K. rate hikes. In a recent speech, Carney said he saw a rate rise next spring, which will rise very gradually thereafter. The Governor said inflation remains relatively benign, dampening the need for an early rise. If he repeats this message tomorrow the pound is likely to come under renewed selling pressure. The pair has been bid on the assumption that UK would be the first G-7 nation to hike rates, but with BOE reticent the enthusiasm for sterling may fade and is could dip to the crisis lows set earlier this month.

 

 

 

Technically the 1.6400-1.6500 area remains high resistance for cable as the pair stalls ahead of the key levels from which it broke down earlier in the summer. Support is now at 1.6250 while there is also spike support at 1.6050 ahead of teh key 1.6000 level.

[Mysticforex 13]

The euro made fresh 22 month lows as the dollar juggernaut continues unabated. A huge part of the weakness now no longer has to do with EZ economic woes but rather the the assumption that the Fed will definitely begin raising rates in Q1 of 2015. However most of the Fed officials remain wary of moving too fast with Charles Evans even going so far as to cite 1937 as the prime example of monetary policy mistake. That's why tomorrow GDP data could prove to be so pivotal. If the number does print at 5% or better as many bulls anticipate then the pressure on the Fed to hike will increase markedly and the euro could have more to fall fall.

 

 

Having broken all the key support levels the euro only has 1.2660 as the main support ahead of the big 1.2500 level. To the upside the pair now needs to recover the 1.2900 handle in order to alleviate the downward bias

[Mysticforex 13]

The EUR/GBP pair now finds itself on the 7700's as it approaches very long term support at the 7700 level that has not been seen since 2008. A break there would open a run to 7500 while only a retake of the 7900 figure alleviates the bearish bias.

[Mysticforex 13]

The AUD/NZD pair faces a double top at the 1.1250 level but a break above opens a possible run to 1.1400. Meanwhile a break below 1.1150 could mark a near term top for the pair

[Mysticforex 13]

EUR/CHF remains stuck in a 1.2050-1.2100 range as it tries to consolidate its downmove. A break below 1.2000 could prove cataclysmic triggering massive stops ahead of that level while a break of 1.2100 to the upside would signal a potential upside breakout

[Mysticforex 13]

For GBP/JPY the 174.00 represents the last level of support ahead of the key 170 figure and a break there could open a run to that downside. A break and hold of the 177.00 however would reestablish a more bullish stance and could put it on path to test 180.00 again.

[Mysticforex 13]

9700 remains the key level for AUD/CAD but a break there could open up a run all the way to 9500 while a break above 9800 would establish a near term bottom in the pair.

[Mysticforex 13]

On a technical basis, we are particularly interested in AUD/NZD because a key cup and handle pattern is forming. This pattern is usually indicative of a new leg higher for the currency pair but only if 1.13 is broken. If this price level is cleared, the next major resistance is at 1.15. However if AUD/NZD breaks below 1.11, the pattern would be negated, leaving the pair vulnerable for a decline towards 1.09.

[Mysticforex 13]

One of the more interesting trades since last Friday's NFPs has been to go long Aussie against the European currencies. After having been brutally sold for the past several months the pair is starting to base around the 8600 level and showing relative out performance against the dollar. Last night's neutral RBA announcement only boosted the unit since it reaffirmed the fact that AU rates will remain stationary for the time being.

 

The 1.8200 level is now the key support in the pair and a break there opens up the possibility of a run to 1.8000 while only a close above 1.8400 relieves the bearish bias.

[Mysticforex 13]

The euro traded sharply higher against the U.S. dollar on the back of dovish FOMC minutes. In addition to expressing specific concerns about the global slowdown, policymakers also said the rising dollar may dampen inflation and pose a risk to exports and growth. This is the first time that we have heard the central bank single out the exchange rate as a source of concern and in doing so, they send the greenback sharply lower. Given the strong gains in the currency over the past few weeks, the dovish tone of the FOMC minutes could be enough to trigger a deeper correction in the dollar, leading to a stronger recovery for euro. Economic data from the Eurozone leaves a lot to be desired and tomorrow’s German trade report is expected to highlight the ongoing strains in the region’s largest economy. However, as we have seen all week, overstretched positions could overshadow data flow.

 

Technicals

Having closed above the first standard deviation Bollinger Band, EUR/USD is now in “turn” mode. The latest rally should extend to 1.28, the 61.8% Fibonacci retracement of the 2012 to 2014 rally. A break above this level would open the door for a stronger move towards 1.30. If EUR/USD drops back below 1.26, new lows are likely.

[Mysticforex 13]

Technically the 96.00 level in CAD/JPY is a key support level and a break there opens a run towards 94.00. A turn higher however would alleviate the selling pressure and a break above 97.50 would put the stance back to neutral,

[Mysticforex 13]

Technical analysis on EUR/CHF is not very reliable because of the distortion created by the threat of SNB intervention. Nonetheless, the September low, which also happens to be the 2-year low at 1.2045 is the key level to watch. I believe that this level will hold. If EUR/CHF moves higher 1.2140 will be resistance.

[Mysticforex 13]

The 106.50-107.00 represents a key support level for USD/JPY and the pair needs to stop its decline in this area if it is to maintain its long term bullish bias. A break below opens the prospect of a move to 105.00 and a full unwind of USD/JPY rally from the summer.

[Mysticforex 13]

The sudden break and then recovery above the 135.00 level looks to be a classic climax low in the pair and as long as it can hold the lows at 134.15 it is likely to base for the time being. A break above 137.00 would alleviate much of the bearish bias, while a break below the 134.00 level would open the possibility of a move to 132.00