- The dollar continued its downwards trajectory with the dollar index falling to a fresh 2.5 year lows. Most assets classes continued to take full advantage and appreciate against the greenback.
- Gold extended its lead from its multi-month lows and closed above 1800 for its second consecutive session.
- EUR/USD extended its lead to the 1.2100 level after breaking major resistance at 1.2000 yesterday and AUD/USD looks set to break to fresh highs. The only major the USD managed to trader higher against the Japanese yen, with USD/JPY closing the session 0.2% higher.
- Australia’s Q3 GDP far exceeded expectations, coming in at 3.3% QoQ versus 2.6% forecast. Still, we expect the RBA to hold rates at record lows and retain their QE program for some time.
Today’s Calendar Events (Times are GMT+11 Sydney)
- China release their final PMI service report. With manufacturing data exceeding expectations earlier this week, a decent service PMI print would point towards a broader economic recovery and could instil a slight risk-on sentiment for the session.
- Final PMI reads across Europe aren’t likely to become too much of a volatile event, unless they deviate significantly from their ‘flash’ reads.
- Initial jobless claims and ISM non-manufacturing reports are the main economic events in the early hours for USD traders.
WTI (WTI): Resistance Confirmed as Support
- A bullish engulfing / outside bar has appeared on the daily chart to confirm support around 43.85.
- As the bias remains bullish above 43.85, bulls can seek long opportunities above this level on intraday timeframes.
- A more conservative approach is to wait for a break above this week’s highs, although before targeting next resistance around the 48 – 48.73 resistance zone.
USD/CNH: Momentum Realigns with the Bearish Trend
- The bearish trend remains intact and resistance has been found between the 10-20 day eMA’s.
- Tuesday saw a daily close confirmation beneath a correction line and yesterday’s high confirmed it as resistance.
- Depending on ones appetite for risk, bears could use the 6.5965 or 6.6356 highs to aid with risk management and target the lows around 6.4500.
GBP/NZD: 3-Bar Reversal Forms Below Resistance
- GBP/NZD remains in a bearish trend on the daily chart and recently broke below a key support zone.
- A 3-bar bearish reversal pattern (evening star) has formed below the resistance zone.
- The bias remains bearish below Tuesday’s high and for a run towards 1.8726.
Watchlist Update:
EUR/USD: The bias remains bullish above 1.2000, although we expect a retracement around the initial target at 1.2152.
Gold (XAU/USD): The bias remains bullish above 1800. Next major target is the 1850 – 1859 resistance zone and then the 1900 zone.
EUR/GBP: The bias remains bullish above 0.9000, although with the initial target at 0.9070 achieved we would prefer to wait for consolidation before reconsidering longs above 0.9000.
Bitcoin (BTCUSD): Prices continue to consolidate below 20,000. A break beneath 18,125 suggests traders may try to close the gap whilst a break above 20,000 assumes bullish continuation.
GBP/CHF: Bearish momentum has increased significantly and closed beneath our initial target at 1.1978.
