General analysis about forex market: 31st October – 4th November

EURUSD technical analysis

There has been a change in the medium-term uptrend in the EURUSD pair. The pair fell sharply on 11th October 2016 and have broken the rising trend line support at 1.1054.Investors were overly cautious about the medium term trend change in the pair since the 61.8% Fibonacci retracement level also coincided with the trend line support at 1.1054 level. Traders were overly cautious about the break of the important support level since there are lots of uncertainties regarding the sustained of the strength of the green bucks. However, the pair finds to manage some support near the low of 24th June 2016 at 1.0857.Traders are waiting patiently for the price to retrace back to the first critical resistance level at 1.1054 levels to short this pair. However, a highly reliable bearish price action confirmation signal is required to sell this pair at that level since the current strength of the green buck is not clear to the investors.

If the pair manages to breach the first critical level then we will see a bullish move in the EURUSD pair towards the next critical resistance level at 1.1160.This level is going to provide a significant amount for resistance to this pair since the price has formed a heavy cluster in that region previously. A valid break of that level will confirm the test of the next key resistance level at 1.1270.A daily closing of the price above that level will confirm the re-establishment of the fresh buying pressure in this market. However, the overall bias is strongly bearish on the EURUSD pair and the pair is most likely to find minor support at 1.0706 levels. A valid break of that critical support level will bring the long-term bearish trend into action and we will see a large drop in the price towards the next critical support level at 1.0451.

GBPUSD technical analysis

The Great Britain Pound is struggling very hard after the Brexit event and still trying to recover its losses to bring stability to the market. The price sharply bounces back from1.14880 level on 7th October and started to form consolidated structure ranging from 1.23260 to 1.20830.Near term resistance for the GBPUSD pair is at 1.23260 levels whereas the critical support lies at 1.2083 levels. If the pair manages to breach the critical resistance level at 1.23260 level then we will see a strong bullish move in the pair towards the next critical resistance level at 1.27940.The pair is most likely to find strong selling pressure from that level and investors are cautiously waiting for the price to retrace back to that level to enter a fresh short position with bearish price action confirmation signal. The overall bias is strongly bearish for the GBPUSD pair and the pair is most likely to test the low of 1.14880 levels. A clear decisive break of the price below that level will bring another sharp fall in the GBPUSD pair towards the 1.1000 mark.

USDCHF technical analysis

There is possible triple top structure formation in the USDCHF pair and price has nicely rejected the key resistance level at 0.99530.In the daily chart, the bearish pin bar has been confirmed by the black solid closing of the price on last Friday. Near term support for this pair is at 0.98210 levels. The pair might bounce back from that level and might turn bullish since the U.S economy is doing pretty well in the recent days. However, a clear decisive break of the price below the critical support level at 0.98210 levels will confirm the end of the bullish run the USDCHF pair and will trigger fresh selling pressure in the market. The next critical support level for this pair lies at 0.9644 level. A valid break of that level will bring further downward movement in the pair towards the key support level at 09440 levels. A valid break of the key support level will confirm the establishment of strong bearish pressure in the market in the longer time frame.

USDJPY technical analysis

The USDJPY pair has broken critical resistance level at 104.350 in the last week. In order to turn bullish in the USDJPY pair the nearest key resistance level at 105.45 needs to be breached. If the pair manages to breach the critical resistance level at 105.45 then we will see strong buying pressure in the market which will ultimately lead the pair towards the next major resistance level 107.47.A clear bullish break of the critical resistance level of the 107.47 level will confirm the establishment of the new uptrend in the market which will ultimately lead the pair towards the  critical resistance level at 111.50.However, if the pair manages to go below the critical support level at 104.35 then we will see the bears in the market again. The first bearish target for this pair would be the next critical support level at 102.50.A clear decisive break of the price below that level will bring the long term key support into action. The pair is most likely to find strong buying pressure near the key support level at 99.00 levels. Considering all the facts and technical parameters buying this pair at the current level with price trading too close to the resistance level will be an immature act. On the other hand in the absence of definite bearish reversal signal shorting this pair is not also our priority. We will stay on the sideline until the market offers the more lucrative trading opportunity to the traders.

 

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