In the first half of trading on Tuesday, the tendency toward the strengthening of the American currency prevailed on the market. This was facilitated by the nervousness of the players caused by the further weakening of a number of currencies of developing countries, the decision of the People's Bank of China to reduce the mandatory reserve rules on the background of the ongoing trade confrontation with the US and budget problems in Italy. However, the second half of the day passed under the sign of the return movement of quotations, as a result of which the quotes of most currency pairs showed minor changes at the end of trading. The weakening of the US dollar was caused by another statement by the President of the United States, Donald Trump, who, in his speech at the White House, once again expressed criticism of the actions of the Fed to tighten monetary policy. Donald Trump said that the regulator raises interest rates too quickly and also paying surplus attention to possible overheating of the national economy.
Today, the focus of the participants is the data on the dynamics of UK GDP. Published at 11:30 Moscow time the data turned out to be worse than market expectations, which led to the beginning of the corrective movement of the GBP/USD quotes. The possibility of such a development of events was indicated by the divergence formed by this morning between the local maximums of prices and the corresponding values of the MACD indicator. In the afternoon, players' attention will be drawn to data on producer price indices in the US for September. The actual values of the indicators should confirm a gradual increase in inflationary pressure, which will indicate the correctness of the actions of the American regulator to further tighten monetary policy and lead to a growth impetus of the dollar.
By the middle of yesterday's trading, against the background of a local strengthening of the US dollar in world markets, EUR/USD quotes briefly broke through the support zone around 1.1450-1.1460, which is the lower boundary of the “triangle” figure, marked on the chart with red lines. However, as a result of the negative price dynamics, the formation of convergence was recorded, which is a growth signal. The second half of the day was marked by the strengthening of the euro.
By Wednesday morning, the pair had stabilized just below 1.1500. Published statistics on UK GDP, which turned out to be weaker than market expectations, led to a correction in prices to the upper boundary of the aforementioned triangle. Further dynamics of quotations will largely depend on statistics on industrial inflation in the United States. In my opinion, the data will support the dollar, which will lead to a continuation of the morning price decline and the achievement of the support zone around 1.1460.
The support zone today is the area 1.1460-1.1465.
Resistance is in the range of 1.1515-1.1530.
GBP/USD
The strengthening of the British pound in recent days has been caused primarily by messages related to the Brexit negotiation process. However, I would not be so optimistic. Today it is expected that the details of the “unique” proposal from the EU will be released. This information can lead to significant movements in pairs with the presence of the British currency. The technical picture indicates the likelihood of a decline in the GBP/USD pair quotes to the 200-period MA on the H1 time frame, which is passing through the 1.3070 mark today. The negative dynamics of the first hours of today was supported by the UK GDP statistics published at 11:30 Moscow time, which turned out to be much worse than the participants' expectations. From a technical point of view, a divergence between local price maxima and the corresponding MACD indicator values is formed on the chart of the pair on the H1 time frame.
The support zone today is located in the 1.3070-1.3090 area (green oval).
The resistance zone is in the range 1.3175-1.3185 (red oval).
Quotes of the pair USD/JPY, after a significant decline on Monday amid risk aversion, yesterday stabilized just above 113.00. Today neutral price dynamics is predicted. From the bottom, the pair is supported by the 200-period MA on the H4 time frame passing through the mark 112.50. From above, the possible fluctuations of quotations are limited to the area 113.70-113.90, in which the pair was trading in the period from October 1 to 8, with the exception of a short-term release upwards on October 3-4. The pair can not yet decide on their future dynamics. There are several factors of multidirectional action on the market at the same time. A number of them contribute to the strengthening of the US dollar (the state of the US economy, the tightening of monetary policy by the US regulator). Others promote the use of the Japanese yen as a defensive asset (periodically updating a number of currencies of the developing world with their minimum values). In my opinion, over the next days, the value of the second group of factors will increase dramatically, which will lead to the beginning of the corrective movement of quotations in order to reach 111.00 mark.
The support area today is the range 112.50-112.75 (green oval).
The resistance zone located in the area of 113.70-113.90 (red oval).
The situation in the USD/CHF pair is similar to the previous USD/JPY pair. Today, neutral dynamics are predicted, which in the late afternoon after the publication of statistics on producer price indices in the United States may be replaced by a tendency to strengthen the Swiss franc. Over the past few days, a number of correction signals have been formed on the pair chart, which were mentioned in yesterday’s overview. This makes it possible to express an opinion about the high probability of the start of negative dynamics in order to reach the 200-period MA area on the H1 time frame passing through the 0.9830-0.9850 area.
Support zones are consistently located in areas 0.9900-0.9910 and 0.9865-0.9875 (green ovals).
Resistance zone is present in the range 0.9945-0.9955 (red oval).
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