{"id":37193,"date":"2019-10-25T16:29:59","date_gmt":"2019-10-25T05:29:59","guid":{"rendered":"https:\/\/www.icmarkets.com\/blog\/?p=37193"},"modified":"2025-11-17T16:54:04","modified_gmt":"2025-11-17T05:54:04","slug":"friday-25th-october-dollar-index-testing-weekly-resistance-at-97-72-prepare-for-a-possible-pullback","status":"publish","type":"post","link":"https:\/\/www.icmarkets.com\/blog\/friday-25th-october-dollar-index-testing-weekly-resistance-at-97-72-prepare-for-a-possible-pullback\/","title":{"rendered":"Friday 25th October: Dollar index testing weekly resistance at 97.72 \u2013 prepare for a possible pullback."},"content":{"rendered":"\n

Friday 25th<\/sup> October: Dollar index\ntesting weekly resistance at 97.72 \u2013 prepare for a possible pullback. <\/a><\/p>\n\n\n\n

Key risk events today:<\/p>\n\n\n\n

German IFO Business Climate; Revised\nUoM Consumer Sentiment; Revised UoM Inflation Expectations.<\/p>\n\n\n\n

EUR\/USD:<\/strong><\/p>\n\n\n\n

Europe\u2019s shared currency concluded\n0.24% weaker against its US counterpart Thursday, pulling the EUR\/USD to 1.11.\nThe pair initially rose amid better-than-expected French PMI data, though was dampened\non the back of German PMI data. The ECB made no new policy moves yesterday, given\nthe stimulus package introduced at its previous meeting. The US dollar index\ncrossed above 97.50, bolstered by upbeat flash manufacturing PMI, though now\nfaces weekly resistance at 97.72. <\/p>\n\n\n\n

The 1.11 handle on the H4 timeframe, reinforced\nby August\u2019s opening level at 1.1079, support coming in at 1.1084, a 50.0%\nretracement ratio at 1.1085, an ABCD correction (blue arrows) at 1.1090 and a\ntrend line support (extended from the low 1.0879), forms a particularly\ninteresting support area (grey). <\/p>\n\n\n\n

Although H4 structure promotes a\nreasonably robust support zone, sellers appear to be strengthening their grip\non the bigger picture. Daily action marginally overthrew support at 1.1110\nyesterday and produced a bearish outside day formation. The next support target\non this scale falls in around the 50-day SMA (blue \u2013 1.1034). Adding to this\ndownbeat tone, weekly price is currently testing the lower limits of a\nresistance area at 1.1119-1.1295, with room to press as far south as the 2016\nyearly opening level at 1.0873.<\/p>\n\n\n\n

Areas of\nconsideration:<\/p>\n\n\n\n

While higher-timeframe structure suggests further losses could be in store, a bounce from the 1.1079\/1.11 H4 support zone remains a strong possibility, targeting the 38.2% and 61.8% Fibonacci retracements of legs A-D at 1.1127 and 1.1147, respectively (taken from the H4 ABCD correction). Traders likely eye sub 1.1079 for protective stop-loss orders. <\/p>\n\n\n

\n
\"\"<\/figure><\/div>\n\n\n

GBP\/USD:<\/strong><\/p>\n\n\n\n

The\nBritish pound yielded ground to the US dollar Thursday as UK Prime Minister\nBoris Johnson called for a general election on Dec. 12 to break Britain\u2019s\nBrexit impasse, conceding for the first time he will not meet his \u2018do or die\u2019\ndeadline to leave the European Union next week (Reuters).<\/p>\n\n\n\n

H4\nmovement, in one fell swoop, shed more than 60 points sub 1.29, consequently\npermitting a test of 1.28 in the shape of an AB=CD correction (blue arrows),\nwhich held firm into the close. With The bounce off 1.28 coming within touching\ndistance of the H4 38.2% Fibonacci retracement value at 1.2868 (a traditional\ntake-profit target linked to AB=CD patterns), a dip beneath 1.28 to trip sell\nstops and test higher-timeframe supports may be on the menu today. <\/p>\n\n\n\n

A\nnoteworthy daily support resides at 1.2769. This level houses strong historical\nsignificance and holds just north of the 200-day\nSMA (orange \u2013 1.2712) which is seen flattening from a down move. Technical\nresearch on the weekly timeframe is currently striving for a retest at the 2019\nyearly opening level drawn from 1.2739 (support).<\/p>\n\n\n\n

Areas of consideration:<\/p>\n\n\n\n

From a technical perspective, the grey zone on the H4 scale, made up of the weekly support at 1.2739 and daily support at 1.2769, is likely an area price will test today should we run stops beneath 1.28. A conservative long from this region would be for H4 action to test the said higher-timeframe zone and close back above 1.28. Entry at the close of the breakout candle with a protective stop-loss order sited beneath its lower shadow is, therefore, an option to consider. <\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

AUD\/USD:<\/strong><\/p>\n\n\n\n

The Australian dollar remained on the\nbackfoot vs. the buck Thursday amid broad dollar strength and mixed trade news.\nBy way of a near-full-bodied daily bearish candle, the AUD\/USD settled a few\npoints north of a particularly interesting support zone on the H4 timeframe at\n0.68\/0.6809. Formed by two trend line supports, both extended from the low\n0.6670, the round number 0.68, a H4 support level at 0.6809, a 50.0 retracement\nratio at 0.6803 and a 38.2% Fibonacci retracement ratio at 0.6802, 0.68\/0.6809 (grey)\nholds plenty of reasons to consider this a buy zone.<\/p>\n\n\n\n

On more of a broader perspective,\ntechnical research also has daily support positioned within the H4 zone at\n0.6808. This is simply an extension of the H4 support at 0.6809, though\nincludes additional data points on the daily timeframe.   <\/em><\/p>\n\n\n\n

From the weekly timeframe, we can see\nthat since engulfing 0.6744 (blue dashed) in early August, the AUD\/USD has been\ncarving a consolidation zone between 0.6894\/0.6677 (grey). With the primary\ndowntrend in play since early 2018, the current consolidation may eventually\nbreakout to the downside. A decisive push beneath the current range likely\nclears the runway to as far south as 0.6359 (not visible on the screen).<\/em><\/p>\n\n\n\n

(Italics<\/em> represent previous\nanalysis).<\/p>\n\n\n\n

Areas of consideration:<\/p>\n\n\n\n

As the H4 candles approach 0.68\/0.6809, we\u2019ll likely witness the buyers\/sellers square off here today for a potential move higher. Conservative traders threatened by the overall downtrend, however, might opt to wait for additional confirmation before committing funds to a long position. This could be as simple as a bullish candlestick pattern, or even drilling down to the lower timeframes and attempting to trade local structure, a trend line break\/retest formation, for example. As for an upside target out of 0.68\/0.6809, August\u2019s opening level at 0.6848 is an option. <\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

USD\/JPY:<\/strong><\/p>\n\n\n\n

Following Wednesday\u2019s advance, which\nculminated in breaking the upper limit of a H4 bullish flag (108.94\/108.46),\nthe USD\/JPY, although somewhat subdued, retested the broken flag as support and\nheld ground Thursday. Assuming buyers remain defensive, Quasimodo resistance at\n108.94 is next in the firing range, closely trailed by 109. <\/p>\n\n\n\n

As highlighted in Thursday\u2019s technical\nbriefing, the 109 handle has been a level of interest for some time, due to\nits mouth-watering connection with daily resistance. A collection of\nresistances are in view between 109.17\/108.99, comprised of a resistance level\nat 109.17, the 200-day SMA (orange\/109.06 \u2013 seen flattening) and Quasimodo\nresistance at 108.99. In the event further selling is seen, support at 106.80\nis in view, set just south of the 50-day SMA (blue \u2013 107.35) which is currently\nfacing north. <\/em><\/p>\n\n\n\n

In terms of areas to keep an eye on\nthe weekly timeframe, Quasimodo support at 105.35 remains the next obvious\ndownside target, while to the upside, the 2019 yearly opening level falls in as\nthe next resistance at 109.68, merging closely with a 127.2% Fibonacci ext.\npoint at 109.56 (taken from the low 104.44).<\/em><\/p>\n\n\n\n

(Italics<\/em> represent previous\nanalysis).<\/p>\n\n\n\n

Areas of consideration:<\/p>\n\n\n\n

Traders looking to buy the retest of\nthe H4 bullish flag face robust resistance around 109. Therefore, those who\npursue this bullish theme should consider adopting strict trade management\nrules. <\/em><\/p>\n\n\n\n

Those eyeing 109 as a possible sell\nzone, on the other hand, might opt to simply enter at market off the 109 base\nand position protective stop-loss orders above 109.17. Conservative traders,\nthough, may elect to wait and see how H4 action behaves before pulling the\ntrigger. This helps avoid whipsaws through 109, which is common viewing around\npsychological boundaries. <\/em><\/p>\n\n\n\n

As for downside targets out of 109, 108.70 appears a logical starting block, followed by the upper edge of the noted H4 bullish flag. <\/em><\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

USD\/CAD:<\/strong><\/p>\n\n\n\n

USD\/CAD prices traded unmoved\nThursday, forming a clear-cut daily doji candlestick formation at the lower end\nof Wednesday\u2019s range. Despite this, WTI remains in reasonably firm position,\nattempting to reclaim $56.00\/bbl. Considering Thursday\u2019s lacklustre\nperformance, much of the following report will echo thoughts put forward in\nprevious analysis.<\/p>\n\n\n\n

With reference to weekly flow, support\nis not expected to emerge until the 1.3015 July 15 low, followed by Quasimodo\nsupport stationed at 1.2887. This follows a recent bearish engulfing candle\nsited just south of the 2017 yearly opening level at 1.3434 and continued\nselling last week. The primary trend has remained north since bottoming in\nSeptember 2017 (1.2061). Currently, though, the candles appear to be in a\nsecondary downtrend, with its peak at 1.3661. <\/em>Daily\nmovement, however, remains supported by a 127.2% Fibonacci extension point at\n1.3066, though this area has yet to chalk up anything meaningful to the upside.\n<\/p>\n\n\n\n

In terms of price action on the H4\ntimeframe, the unit continues to languish sub 1.31, with support not expected\nto enter the fray until reaching 1.3028 (not visible on the screen).<\/p>\n\n\n\n

Areas of consideration:<\/p>\n\n\n\n

On account of the above analysis, sellers appear to be gaining the upper hand. A decisive retest seen at the underside of 1.31\/H4 resistance at 1.3115 (preferably in the shape of a H4 bearish candlestick pattern) would help confirm this downside bias and validate weakness off the 127.2% Fibonacci extension point at 1.3066 on the daily timeframe. Downside targets fall in at 1.3028, the H4 support, as well as the 1.3015 July 15 low on the weekly timeframe. <\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

USD\/CHF:<\/strong><\/p>\n\n\n\n

USD\/CHF bulls continued their\noffensive phase Thursday, adding nearly 0.20%. The key event yesterday was the\nEuropean Central Bank (ECB) meeting but had a limited impact on currencies, given\nthe stimulus package introduced at its previous meeting. <\/p>\n\n\n\n

Technically, the H4 candles retested\n0.99, albeit slightly surpassing the figure to bring in buyers off September\u2019s\nopening level at 0.9896, and concluded the session a few points short of\nAugust\u2019s opening level at 0.9934. A break of this level has trend line\nresistance extended from the high 1.0027 to target, followed closely by\nOctober\u2019s opening level at 0.9977.<\/p>\n\n\n\n

In conjunction with H4 flow, daily\nprice remains buoyant north of its 50-day SMA (blue \u2013 0.9898), which according\nto this timeframe, unlocks the door to a possible move towards the 200-day SMA\n(orange \u2013 0.9955), closely shadowed by a familiar resistance zone at\n1.0010-0.9986. <\/em><\/p>\n\n\n\n

Recent moves on the weekly timeframe\nhas the unit trading back within the walls of supply at 1.0014-0.9892. Note\nthis area was marginally engulfed early October, potentially setting the\nlong-term stage for a run to resistance at 1.0110 and Quasimodo resistance at\n1.0124.<\/em><\/p>\n\n\n\n

(Italics<\/em> represent previous\nanalysis).<\/p>\n\n\n\n

Areas of consideration:<\/p>\n\n\n\n

Having weekly price toying with supply and daily price eyeing its 200-day SMA around 0.9955, we could potentially see a test of the converging H4 trend line resistance extended from the high 1.0027 enter the mix and hold lower. Therefore, a break of August\u2019s opening level at 0.9934 followed by a test of H4 trend line resistance by way of a H4 bearish candlestick formation (entry and risk can be calculated on the back of this structure), could be of interest to some traders for possible shorts. <\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

Dow Jones Industrial Average:<\/strong><\/p>\n\n\n\n

Major US equity benchmarks finished\nmixed Thursday amid a spell of corporate quarterly results. The Dow Jones\nIndustrial Average declined 28.42 points, or 0.11%; the S&P 500 added 5.77\npoints, or 0.19% and the tech-heavy Nasdaq 100 climbed 77.25 points, or 0.98%.<\/p>\n\n\n\n

Considering\nthe Dow\u2019s somewhat subdued status yesterday, technical research remains\nunchanged. <\/strong><\/p>\n\n\n\n

H4\naction remains bolstered by a support area coming in at 26522-26622. Further\nbuying on this scale could lead to October\u2019s opening level at 26947\/trend line\nresistance (extended from the high 27322) entering the mix, and possibly\nresistance priced in at 27058. Beyond the aforesaid support zone, nonetheless,\nwe have September\u2019s opening level residing at 26398, which happens to coincide\nwith a 50.0% support value and a 61.8% Fibonacci\nratio at 26419. Between 26398 and the underside of the support area at 26522,\ntherefore, is considered a fakeout zone (yellow), as there are undoubtedly a\nnumber of sell stops just waiting to be plucked beneath the said support zone. <\/p>\n\n\n\n

Research on the daily timeframe shows\nprice is capped between supply at 27110-26813 (blue – positioned just south of\nweekly resistance at 27335) and the 50-day SMA (blue \u2013 26616). Both the 50-day\nSMA and the 200-day SMA (orange \u2013 26153) still face north. <\/p>\n\n\n\n

Areas of consideration: <\/p>\n\n\n\n

The yellow zone between the H4 support\narea at 26522-26622 and September\u2019s opening level at 26398 provides an\ninteresting buy zone, in the event prices dip lower today. <\/p>\n\n\n\n

The area between H4 resistance at\n27058, October\u2019s opening level at 26947 and trend line resistance also offers a\npotential reversal zone for sellers today. <\/p>\n\n\n\n

Irrespective of the area selected, conservative traders may still elect to wait for additional candlestick confirmation to form before pulling the trigger. Not only does this help avoid whipsaws, it provides additional entry and risk limits to consider. <\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

XAU\/USD (GOLD):<\/strong><\/p>\n\n\n\n

No-deal Brexit fears weighed on market\nsentiment Thursday, consequently underpinning demand for gold\u2019s safe-haven\nstatus. <\/p>\n\n\n\n

H4 action retested the top edge of a\nsymmetrical triangle formation (1497.4\/1473.8) and advanced. Breakout buyers\nhere likely have protective stop-loss orders plotted beneath the opposing\ntriangle limit around 1482.4, with an initial take-profit target set at the\nresistance area drawn from 1519.9-1512.1, followed by September\u2019s opening level\nat 1526.2.<\/p>\n\n\n\n

Strengthening the H4 timeframe\u2019s\nbullish theme is weekly price trading from a support area at 1487.9-1470.2.\nWeekly resistance is seen at 1536.9, whereas two layers of weekly support are\nvisible at 1392.0 and 1417.8, in the event we push for lower ground. In terms\nof the longer-term primary trend, gold has been trading northbound since the\nlater part of 2015 (1046.5).<\/p>\n\n\n\n

Contrary to weekly and H4 flow\nexhibiting scope for higher ground, daily price shows the upper edge of a\nbullish flag entered the fight yesterday (1557.1\/1485.3) as well as the 50-day\nSMA (blue \u2013 1504.8). A break above this line would confirm a strong upside\nbias.<\/p>\n\n\n\n

Areas of consideration:<\/p>\n\n\n\n

Those long the break of the H4 symmetrical triangle may want to consider reducing risk to breakeven and banking a portion of the position at this point, due to daily movement recently shaking hands with resistance (see above). The remainder of the position can be left in motion in case further upside is observed towards the H4 resistance area at 1519.9-1512.1, followed by September\u2019s opening level at 1526.2.<\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

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Friday 25th October: Dollar index testing weekly resistance at 97.72 \u2013 […]<\/p>\n","protected":false},"author":1,"featured_media":81071,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[215,339,195],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37193"}],"collection":[{"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/comments?post=37193"}],"version-history":[{"count":7,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37193\/revisions"}],"predecessor-version":[{"id":81341,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37193\/revisions\/81341"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/media\/81071"}],"wp:attachment":[{"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/media?parent=37193"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/categories?post=37193"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/tags?post=37193"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}