Morning Forex Report: USD Positions Pared Ahead Of Pivotal Week

Market Commentary  

USD pressured overnight as players pare positions heading into next weeks critical FOMC session. Markets continue to reprice lower the probability of a rate move next week.

EURUSD hit a six day high testing stops above 1.13 as the USD fell amid the mixed US data, deepening the concerns of the prolonged hold of US interest rates at emergency levels.

The Bank of England kept rates at record-low 0.5 percent this month as expected, while the vote was 8-1. GBPUSD hit a two-week high of 1.5475 against the dollar after BOE policymakers showed less concerns about the domestic impact of turmoil in global markets.

USDJPY rallied for a fourth day after a lawmaker said the BoJ’s late October meeting would be a “good opportunity” for further monetary stimulus. Liberal Democratic Party lawmaker Kozo Yamamoto, who has advised Prime Minister Shinzo Abe on economic policy, said that the BOJ should increase annual asset purchases by at least 10 trillion yen

Technical  Commentary 

EURUSD Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish

  • Broken resistance at 1.1250 becomes intraday support while this caps downside expect a test of 1.1350, the upside of the broader 1.1050 – 1.1350 range.
  • Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology bullish but stalling
  • Monitoring intraday price and Order Flow indicators on a test of 1.1050 or 1.1350

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GBPUSD: Short Term (1-3 Days): Bullish  – Medium Term (1-3 Weeks) Bearish

  • The close above 1.54 targets pivotal 1.5550 while 1.5350 caps intraday downside reactions
  • Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology bearish but positively orientated towards retesting midpoint from below
  • Monitoring intraday price action and Order Flow indicators on a test of 1.5350 or 1.5550

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USDJPY: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bullish

  • As 121.50 caps upside expect retest of 119.50. Only a close back above 122.50 relieves downside pressure
  • Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology bullish
  • Monitoring intraday price action and Order Flow indicators on a test of 119 or 122

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EURJPY: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish

  • While 135 supports intraday downside reactions expect a retest of range resistance towards 138.50. A failure at 135 would target a breach of 132 next
  • Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology bullish
  • Monitoring intraday price action and Order Flow indicators at 138 or 132

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