{"id":37250,"date":"2019-10-30T14:21:26","date_gmt":"2019-10-30T03:21:26","guid":{"rendered":"https:\/\/www.icmarkets.com\/blog\/?p=37250"},"modified":"2025-11-17T16:53:46","modified_gmt":"2025-11-17T05:53:46","slug":"wednesday-30th-october-dollar-index-lower-ahead-of-fed-meeting","status":"publish","type":"post","link":"https:\/\/www.icmarkets.com\/blog\/wednesday-30th-october-dollar-index-lower-ahead-of-fed-meeting\/","title":{"rendered":"Wednesday 30th October: Dollar index lower ahead of Fed meeting."},"content":{"rendered":"\n
<\/p>\n\n\n\n
Key risk events today:<\/strong><\/h3>\n\n\n\n
German Prelim CPI m\/m; US ADP Non-Farm\nEmployment Change; US Advance GDP q\/q; US Advance GDP Price Index q\/q; BoC\nMonetary Policy Report, Rate Statement, Overnight Rate and Press Conference; Crude\nOil Inventories; FOMC Statement, Federal Funds Rate and FOMC Press Conference.<\/p>\n\n\n\n
EUR\/USD:<\/strong><\/h3>\n\n\n\n
Europe\u2019s shared currency settled a touch\nhigher against the buck Tuesday, underpinned by less-than-stellar US consumer\nconfidence data. According to the US Conference Board, consumer confidence decreased\nmarginally in October, following a decline in September. The Index now stands\nat 125.9 (1985=100), down from 126.3. This indicator reflects prevailing\nbusiness conditions and likely developments for the months ahead.<\/p>\n\n\n\n
Chart studies reveal the 1.11 handle\nsuffered a break to the upside following the news release, though shortly after\nencountered mild selling pressure off a H4 trend line support-turned resistance\n(taken from the low 1.0879). Failure to cap upside here could result in\nincreased demand for the euro to as far north as H4 resistance at 1.1163, as\nlimited supply is seen to the left of current price (green arc). <\/p>\n\n\n\n
Against the backdrop of medium-term\nflow, higher-timeframe movement has daily price tackling resistance priced in\nat 1.1110. A decisive push beyond this plane exposes last Monday\u2019s high at 1.1179,\nclosely shadowed by the 200-day SMA (orange \u2013 1.1198) and the 61.8% Fibonacci\nretracement ratio at 1.1211. Weekly flow, as underlined in Monday\u2019s technical\nbriefing, trades at the underside of a long-standing resistance area drawn from\n1.1119-1.1295. Increased selling from here has the 2016 yearly opening level at\n1.0873 to target. Concerning trend direction, the primary downtrend has been in\nmotion since topping in early 2018 at 1.2555.<\/p>\n\n\n\n
Areas of\nconsideration:<\/p>\n\n\n\n
The recent break above 1.11 could simply\nbe a run of stops to push lower, according to chart studies. Of course, we will\nonly know this to be true if H4 price reclaims 1.11 to the downside. However,\nthe fact we have a weekly resistance area in play along with a daily resistance\nlevel, structurally this suggests sellers may have the upper hand at the\nmoment. <\/p>\n\n\n\n
Consequently, buying the break of 1.11\nis considered a chancy move today. A H4 close back beneath 1.11, nonetheless, will\nlikely fuel a move to at least 1.1062\/the 50-day SMA (blue \u2013 1.1035), and may\nbe something that interests sellers. <\/p>\n\n\n\n<\/figure>\n\n\n\n
GBP\/USD:<\/strong><\/h3>\n\n\n\n
The British pound advanced vs. the\ndollar Tuesday amid headlines the UK government won the vote for an early\nGeneral Election on December 12th<\/sup>, with 438 votes for, and 20\nagainst. Although a step closer to certainty, the 1.29 handle held firm and saw\nprice trim the majority of intraday gains into the close. Technically, the day\nended in the shape of a long-legged daily doji candlestick formation, signifying\nindecision. <\/p>\n\n\n\n
The likelihood of a retest at 1.28 on\nthe H4 timeframe is still in sight, according to our technical studies. Traders\nconsidering longs off this boundary, though, may want to acknowledge the grey\nzone sited just beneath, made up of a weekly support at 1.2739, daily support\nat 1.2769 and a 161.8% H4 Fibonacci ext. point at 1.2738. Additionally, a\npotential H4 three-drive formation also terminates within the zone (black\narrows) at 1.2755. 1.2738\/1.2769 is likely an area price will test should we\nrun stops beneath 1.28.<\/p>\n\n\n\n
Areas of consideration:<\/p>\n\n\n\n
Outlook unchanged.<\/strong><\/p>\n\n\n\n
A conservative long from 1.2738\/1.2769 is\nfor H4 price to test this zone and close back above 1.28. Entry at the close of\nthe breakout candle with a protective stop-loss order sited beneath its lower\nshadow is, therefore, an option to consider, targeting a move to 1.29 and\npossibly higher, according to higher-timeframe action which shows room to press\nas far north as a daily resistance area at 1.3019-1.2975. <\/p>\n\n\n\n<\/figure>\n\n\n\n
AUD\/USD:<\/strong><\/h3>\n\n\n\n
Kicking off with a look at the\nhigher-timeframe technical picture this morning, weekly price, as underscored\nin Monday\u2019s technical briefing, remains consolidating between 0.6894\/0.6677 (light\ngrey). With the primary downtrend in play since early 2018, the current\nconsolidation may eventually breakout to the downside, despite price action\ntoying with its upper edge at the moment. A decisive push lower likely clears\nthe airstrip to as far south as 0.6359 (not visible on the screen).<\/p>\n\n\n\n
Price action on the daily timeframe\nreveals the unit established a \u2018floor\u2019 ahead of support at 0.6808 in recent\nmovement and remains on the front foot this week. Below 0.6808 we have the\n50-day SMA lurking nearby (blue \u2013 0.6791), which is currently facing northbound\nafter a sizeable downside move. Aside from 0.6882 and the 0.6894 September 12\nhigh, swing resistance resides around 0.6910.<\/p>\n\n\n\n
Recent upside on the H4 scale dethroned\nAugust\u2019s opening level at 0.6848 and, as of current price, appears poised to\nretest the level as support today. Resistance on this scale falls in close by\nat 0.6883, with a break suggesting a run to the 0.69 handle. Beneath 0.6848, a familiar\nsupport area is seen between 0.68\/0.6809 (formed by a trend line support\nextended from the low 0.6670, the round number 0.68, a support level at 0.6809,\na 50.0 retracement ratio at 0.6803 and a 38.2% Fibonacci retracement ratio at\n0.6802). <\/p>\n\n\n\n
Areas of consideration:<\/p>\n\n\n\n
Outlook unchanged. <\/strong><\/p>\n\n\n\n
In terms of technical confluence, the\n0.68\/0.6809 support area on the H4 timeframe remains of interest for potential\nlong scenarios this week. In the event we hold firm above August\u2019s opening\nlevel at 0.6848, as highlighted in Tuesday\u2019s briefing, an intraday long may\nalso be an option, targeting the 0.6883 as the initial port of call. <\/p>\n\n\n\n
Conservative traders threatened by the\noverall downtrend, however, might opt to wait for additional confirmation\nbefore committing funds to a long position. This could be as simple as a H4\nbullish candlestick pattern, or even drilling down to the lower timeframes and\nattempting to trade local structure, a trend line break\/retest formation, for\nexample. <\/p>\n\n\n\n<\/figure>\n\n\n\n
USD\/JPY:<\/strong><\/h3>\n\n\n\n
US equities, specifically the Dow Jones\nIndustrial Average, revealed a pause in upside movement Tuesday, finding a temporary\nceiling off H4 resistance at 27086. This \u2013 coupled with the 10-year US Treasury\nyield capped at 1.84% and the US dollar index closing lower for a second\nsuccessive session \u2013 mildly weighed on the USD\/JPY yesterday. <\/p>\n\n\n\n
From a technical standpoint, following\non from recent reports, the 109 handle has been a level of interest for some\ntime, due to its mouth-watering connection with daily resistances between 109.17\/108.99\n(comprised of a resistance level at 109.17, the 200-day SMA [orange\/109.05 \u2013\nseen flattening] and Quasimodo resistance at 108.99). In addition to this, the\n109 handle also came with bearish H4 RSI divergence (blue line).<\/p>\n\n\n\n
In the event sellers make a stand from\nthe said daily resistances, support at 106.80 is in view, fixed south of the\n50-day SMA (blue \u2013 107.54) which is currently facing north. The only grumble to\na downside move is weekly price exhibiting scope for a pop higher to the 2019\nyearly opening level at 109.68, which happens to merge closely with a 127.2%\nFibonacci ext. point at 109.56.<\/p>\n\n\n\n
Areas of consideration:<\/p>\n\n\n\n
Traders with short positions off 109 and\nprotective stop-loss orders sited above daily resistance at 109.17 are in a\nreasonably good position this morning, with the likelihood of 108.70 (the first\ndownside target on the H4 timeframe) entering the mix today. A break beneath\nhere has H4 support at 108.41 to target, followed by the 108 handle\/September\u2019s\nopening level at 108.07.<\/p>\n\n\n\n<\/figure>\n\n\n\n
USD\/CAD:<\/strong><\/h3>\n\n\n\n
The Canadian dollar fell sharply across\nthe board Tuesday amid declining WTI prices, a day before the BoC meeting.\nUSD\/CAD movement kicked lower to 1.3042 before rotating higher and testing the\n1.31 handle on the H4 scale. For those who read Tuesday\u2019s technical briefing\nyou may recall the following pieces:<\/p>\n\n\n\n
From the weekly timeframe, we can see\nthe pair has traded lower for three consecutive weeks \u2013 each session shaped in\nthe form of a near-full-bodied bearish candle. Support is not expected to\nemerge until the 1.3015 July 15 low, followed by Quasimodo support stationed at\n1.2887. The primary trend has remained north since bottoming in September 2017\n(1.2061). Currently, though, the candles appear to be in a secondary downtrend\nafter breaking trend line support (extended from the low 1.2247), with a market\npeak at 1.3661. <\/em><\/p>\n\n\n\n
According to the daily timeframe, the\nstage appears set for a run towards 1.3015 (essentially the July 15 low\nhighlighted on the weekly timeframe). <\/em>However,\nfollowing yesterday\u2019s daily bullish outside candlestick formation, this may\nentice buyers into the market. <\/p>\n\n\n\n
Areas of consideration:<\/p>\n\n\n\n
Despite the recently formed daily\nbullish candlestick pattern, sellers still appear to have the upper hand. A\ndecisive retest seen at the underside of 1.31, shaped in the form of a H4\nshooting star candlestick pattern (considered a bearish signal), recently took\nshape, which was a noted move to keep an eye out for in Tuesday\u2019s report. Entry\nat current price could be an option, with protective stop-loss orders plotted\neither above the upper shadow of the H4 shooting star (1.3100) or H4 resistance\nat 1.3115. <\/p>\n\n\n\n
Continued selling from current price will\nlikely land the H4 candles at 1.3028, the H4 support, bolstered by the 1.3015\nJuly 15 low on the weekly timeframe.<\/p>\n\n\n\n<\/figure>\n\n\n\n
USD\/CHF:<\/strong><\/h3>\n\n\n\n
The US dollar concluded a shade lower against\nthe Swiss franc Tuesday, weighed on by trend line resistance extended from the\nhigh 1.0027 on the H4 timeframe. The move lower drew in August\u2019s opening level\nat 0.9934, holding firm into the close by way of mild lower candlestick shadows.\nA push higher from here and engulf of the said trend line resistance exposes\nOctober\u2019s opening level at 0.9977, a trend line support-turned resistance taken\nfrom the low 0.9843, Quasimodo resistance at 0.9989 and the key figure 1.0000\n(parity). Sub 0.9934, on the other hand, has the 0.99 handle in sight, closely shadowed\nby September\u2019s opening level at 0.9896.<\/p>\n\n\n\n
With respect to the higher timeframes,\nhere\u2019s what Tuesday\u2019s technical briefing reported:<\/p>\n\n\n\n
Supply on the weekly timeframe at 1.0014-0.9892\nremains in play though does highlight somewhat of a delicate tone. The\nbeginning of October witnessed a penetration to the outer edge of the supply\narea\u2019s limit, possibly tripping a portion of buy stops and weakening sellers.\nFurthermore, a potential ABCD correction (black arrows) at 1.0214 implies\nhigher prices could be on the cards, engulfing Quasimodo resistance at 1.0124\nand drawing in trend line support-turned resistance extended from the low\n0.9187. According to the primary trend, price reflects a slightly bullish tone.\nHowever, do remain aware we have been rangebound since the later part of 2015\n(0.9444\/1.0240).<\/em><\/p>\n\n\n\n
In recent movement, daily price tested the\n200-day SMA (orange \u2013 0.9955) which held firm by way of back-to-back shooting\nstar candlestick patterns (considered a bearish signal). Downside from this\nangle could see the 50-day SMA (blue \u2013 0.9907) re-enter the fold.<\/em><\/p>\n\n\n\n
Note the underside of a daily resistance\narea marks the 0.9986 point (positioned above the 200-day SMA), sited only a\nfew points north of October\u2019s opening level at 0.9977 on the H4. The H4 trend\nline support-turned resistance, as of current price, aligns almost to-the-point\nwith the underside of the daily structure. Therefore, between 1.0000 and 0.9977\n(green) on the H4 appears a reliable location to consider searching for\nshorting opportunities. <\/em><\/p>\n\n\n\n
Areas of consideration:<\/p>\n\n\n\n
A break of the H4 trend line resistance\nwill likely trip a number of buy stops, filling orders from traders attempting\nto fade the descending line and those anticipating a breakout higher. These\norders offer liquidity for bigger players to short from 1.0000\/0.9977 (green). Traders\nnot comfortable selling at 0.9977 and positioning protective stop-loss orders\nabove 1.0000 may elect to wait and see how price action behaves before pulling\nthe trigger. For example, a lower-timeframe bearish flag may form or an\nascending wedge or even a diamond top, each offering high-probability\nopportunities to jump aboard any downside move generated out of 1.0000\/0.9977. <\/p>\n\n\n\n
A H4 close beneath 0.9934 today may open\nthe door to intraday bearish scenarios towards 0.99. Traders, here, however,\nare urged to ensure risk\/reward is satisfactory given the possibility support\nmay enter the fight before 0.99 at 0.9907: the 50-day SMA. <\/p>\n\n\n\n<\/figure>\n\n\n\n
Dow Jones Industrial Average:<\/strong><\/h3>\n\n\n\n
US stocks finished lower Tuesday, a day\nafter the S&P 500 index scored a record close and a day before the Federal\nReserve meeting which is expected to deliver another interest rate cut. The Dow Jones\nIndustrial Average erased 19.30 points, or 0.07%; the S&P 500 declined 2.53\npoints, or 0.08% and the tech-heavy Nasdaq 100 also declined 63.16 points, or 0.78%.<\/p>\n\n\n\n
Technically, the Dow witnessed\nlimited change in terms of price movement<\/strong>, holding beneath H4 resistance at\n27086,\nafter tunnelling through October\u2019s opening level fixed at 26947 and trend line\nresistance pencilled in from the high at 27321. <\/p>\n\n\n\n
Resistance at 27335 remains a focal\npoint on the weekly chart, sited only a few points south of the all-time high\n27388. And, despite a minor setback to 21452, the primary trend in this market\nremains facing northbound. Research on the daily timeframe shows price holding\nfirmly north of the 50-day SMA (blue \u2013 26676). Both the 50-day SMA and the\n200-day SMA (orange \u2013 26202) face north, with the next upside target set at the\nweekly resistance presented above at 27335.<\/p>\n\n\n\n
Clearance\nof 27086 on the H4 scale potentially offers an early cue to a move towards the\nsaid weekly resistance level. <\/p>\n\n\n\n
Areas of consideration: <\/p>\n\n\n\n
Outlook unchanged.<\/strong><\/p>\n\n\n\n
The area between H4 resistance at 27086\nand weekly resistance at 27335 remains of interest this morning. A decisive\nclose beyond 27086 on a H4 basis likely unlocks the door to 27335, offering\ntraders potential long opportunities, either on a retest motion at 27086 or\nsimply entering on the breakout candle\u2019s close. <\/em><\/p>\n\n\n\n<\/figure>\n\n\n\n
XAU\/USD (Gold):<\/strong><\/h3>\n\n\n\n
Gold,\naccording to the weekly timeframe\u2019s technical setting, remains toying with the\ntop edge of a support area at 1487.9-1470.2. Resistance is seen at 1536.9,\nwhereas two layers of support are visible at 1392.0 and 1417.8, in the event we\npush for lower ground. With respect to the longer-term primary trend, gold has\nbeen trading northbound since the later part of 2015 (1046.5). <\/p>\n\n\n\n
Contrary\nto the weekly timeframe, daily price shows the upper edge of a bullish flag\nentered the mix in the later stages of last week (taken from the high 1557.1)\nand has held price lower this week. Note the top edge of the bullish flag merges\nclosely with a 50-day SMA (blue \u2013 1504.9) and formed a beautiful shooting star\nbearish signal Friday. The next downside target from this region falls in at a\nsupport area drawn from 1448.9-1419.9 (has a 38.2% Fibonacci retracement ratio\naligning with its top edge at 1448.5). <\/p>\n\n\n\n
Recent\nselling on the H4 timeframe overthrew local trend line support etched from the\nlow 1458.9 and re-entered the walls of a familiar support area at 1481.1-1490.2.\nThe break of the trend line support, coupled with daily price portending a\nstrong bearish tone at the moment, places a bold question mark on the said H4\nsupport zone. The only thing backing this area right now is the fact we remain at\na weekly support area mentioned above at 1487.9-1470.2.<\/p>\n\n\n\n
Areas\nof consideration: <\/p>\n\n\n\n
Neither\na long nor short appears attractive at the moment. Irrespective of the price\ndirection selected, clear viable opposition is nearby. In cases such as this, settling\nfor no position Is often the better position.<\/p>\n\n\n\n<\/figure>\n\n\n\n
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Key risk events today: German Prelim CPI m\/m; US ADP Non-Farm […]<\/p>\n","protected":false},"author":1,"featured_media":81071,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[340,216,215,339,195],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37250"}],"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=37250"}],"version-history":[{"count":3,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37250\/revisions"}],"predecessor-version":[{"id":81340,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37250\/revisions\/81340"}],"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=37250"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/categories?post=37250"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/tags?post=37250"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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