The Federal Open Market Committee\n(FOMC) cut its benchmark funds rate by 25 basis points to a range of 1.5% to 1.75%\non Wednesday, as expected, but specified the moves to ease policy could be approaching\na pause. <\/p>\n\n\n\n
Initially, the dollar index advanced following\nthe Fed rate decision. However, through the course of Powell\u2019s press\nconference, the USD was offered, travelling from a high of 98.00 to 97.45, after\nChair Powell signalled rate hikes were not on the table, leaving the bias for\nmonetary policy to be on hold.<\/p>\n\n\n\n
EUR\/USD action concluded Wednesday on\nstrong footing, adding more than 38 points, or 0.35%. <\/p>\n\n\n\n
Chart studies reveal weekly movement\ntrades back within the parapets of a long-standing resistance area drawn from 1.1119-1.1295.\nA break of this zone has the 2019 yearly opening level to target at 1.1445,\nwhereas a push lower has the 2016 yearly opening level at 1.0873 in sight. Concerning\ntrend direction, the primary downtrend has been in motion since topping in\nearly 2018 at 1.2555.<\/p>\n\n\n\n
Daily price trades within touching\ndistance of last Monday\u2019s high at 1.1179, closely shadowed by the 200-day SMA\n(orange \u2013 1.1197) and 61.8% Fibonacci retracement ratio at 1.1211. In terms of\nthe H4 timeframe, resistance at 1.1163 is next in the firing line after\nestablishing support off the 1.11 handle. Continued bidding may lead to an\napproach towards the 1.12 handle, which, according to daily structure, aligns\nclosely with both the 200-day SMA and the 61.8% Fibonacci ratio. In addition to\nthis, indicator-based traders may wish to acknowledge the relative strength\nindex (RSI) is seen approaching overbought status (yellow).<\/p>\n\n\n\n
Areas of\nconsideration:<\/p>\n\n\n\n
Though a reaction may develop from H4\nresistance at 1.1163 today, most traders likely have their crosshairs fixed on\nthe 1.12 handle for shorts today. Knowing this barrier merges with the 200-day\nSMA at 1.1197 and a 61.8% daily Fibonacci resistance at 1.1211, as well as\nweekly price trading within a resistance area at 1.1119-1.1295, sellers likely\nconsider this a high-probability sell zone. <\/p>\n\n\n\n
Conservative traders, however, may opt to wait and see if a H4 bearish candlestick formation emerges before pulling the trigger, in an attempt to avoid any whipsaw through 1.12, which is common viewing around psychological numbers (entry\/risk can then be set according to this structure). <\/p>\n\n\n\n GBP\/USD:<\/strong><\/p>\n\n\n\n The British pound modestly extended\nits advance against the dollar Wednesday, largely on the back of the Federal\nReserve cutting its benchmark funds rate by 25 basis points to a range of 1.5%\nto 1.75%. UK lawmakers also approved a bill for setting the next election date\nto December 12th, with the vote winning 438 to 20. With an election now booked,\nBrexit news flow may slow as campaigning gets underway.<\/p>\n\n\n\n From a technical standpoint, price\naction remains pretty much unchanged in terms of structure. H4 flow engages\nwith the 1.29 handle, with a break perhaps cheering a run to the key figure\n1.30. As highlighted in Wednesday\u2019s technical briefing, though, a retest at\n1.28 is also still in sight. Traders considering longs off this boundary,\nnevertheless, may want to acknowledge the grey zone sited just beneath, comprised\nof a weekly support at 1.2739, daily support at 1.2769 and a 161.8% H4\nFibonacci ext. point at 1.2738. Additionally, a potential H4 three-drive formation\nalso terminates within the zone (black arrows) at 1.2755. 1.2738\/1.2769 is\nlikely an area price will test should we run stops beneath 1.28.<\/p>\n\n\n\n Areas of consideration:<\/p>\n\n\n\n A decisive H4 close north of 1.29\ntoday could set the technical stage for a bullish theme, targeting the\nunderside of a daily resistance area at 1.3019-1.2975, followed by 1.30 on the\nH4. To take advantage of any upside above 1.29, traders either typically enter\non the breakout candle and position stops beneath the lower shadow or, more\nconservatively, wait and see if a retest at 1.29 forms before making a\ndecision. <\/p>\n\n\n\n A conservative long from 1.2738\/1.2769 is also still a possibility: H4 price to test the 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, targeting a move to 1.29 and possibly higher. <\/p>\n\n\n\n AUD\/USD:<\/strong><\/p>\n\n\n\n AUD\/USD bulls entered an offensive\nphase Wednesday, bolstered by the Fed recently cutting interest rates to a\nrange of 1.5% to 1.75%, and markets continuing to soak up trade-deal optimism. <\/p>\n\n\n\n Technically, though, weekly price is\nseen challenging the upper edge of its range between 0.6894\/0.6677 (light grey).\nA pivotal move higher here exposes the 2019 yearly opening level at 0.7042,\nwhich, as you can see, has served well as support\/resistance on several\noccasions in the past.<\/p>\n\n\n\n Before pressing for higher ground on\nthe weekly timeframe, daily traders must contend with a swing resistance\nplotted at 0.6910. A break of this level, although helping to confirm a bullish\nbias, has nearby resistance in the shape of a 200-day SMA (orange \u2013 0.6955).\nThe 50-day SMA (blue \u2013 0.6795) currently faces northbound, while the said\n200-day SMA still points south. <\/p>\n\n\n\n A closer reading of price action on\nthe H4 timeframe reveals the unit trading north of 0.69, which is typically\nconsidered a bullish indicator. Indicator-based traders may also note the\nrelative strength index (RSI) displays bearish divergence out of overbought\nterritory (red line). <\/p>\n\n\n\n Areas of consideration:<\/p>\n\n\n\n AUD\/USD\u2019s technical framework, according to our chart studies, is at a critical crossroads. While H4 price recently brushed aside 0.69, the fact we\u2019re trading at the top edge of a weekly range at 0.6894 and daily resistance is in sight at 0.6910, buying may be hampered. Though until H4 price reclaims 0.69 to the downside and possibly even H4 support at 0.6883, selling the higher-timeframe structure is chancy. Sub 0.6883, it appears the pair has room to press to at least August\u2019s opening level at 0.6848 as the initial downside target.<\/p>\n\n\n\n USD\/JPY:<\/strong><\/p>\n\n\n\n Thanks largely to the Fed cutting\ninterest rates and specifying moves to ease policy could be approaching a pause,\nUSD\/JPY flow on the H4 timeframe witnessed a horrid stop run take shape through\n109, testing highs of 109.28 before ending the day unmoved. <\/p>\n\n\n\n Although most traders short the 109\nhandle were likely taken out on the back of yesterday\u2019s move, the opportunity\nto re-enter the market short is certainly there. As highlighted in Wednesday\u2019s\ntechnical briefing, the reasons behind favouring a move lower from 109 stems\nfrom higher-timeframe structure between 109.17\/108.99 (comprised of a resistance\nlevel at 109.17, the 200-day SMA [orange\/109.05 \u2013 seen flattening] and\nQuasimodo resistance at 108.99). <\/p>\n\n\n\n In the event sellers make a stand from\nthe said daily resistances, the 50-day SMA (blue \u2013 107.63) is in view, followed\nby support at 106.80. The only grumble to a downside move is weekly price\nexhibiting scope for a pop higher to the 2019 yearly opening level at 109.68,\nwhich happens to merge closely with a 127.2% Fibonacci ext. point at 109.56.<\/p>\n\n\n\n Areas of consideration:<\/p>\n\n\n\n Entry at current price is certainly an option today, with protective stop-loss orders plotted above yesterday\u2019s high at 109.28. The fact we have robust daily resistance in motion alongside a daily shooting star candlestick pattern (considered a bearish signal) is likely enough to draw in sellers to at least H4 support at 108.41, with a move to 108 also a possibility. <\/p>\n\n\n\n USD\/CAD:<\/strong><\/p>\n\n\n\n The Canadian dollar fell sharply\nagainst its US counterpart Wednesday, with USD\/CAD adding more than 70 points,\nor 0.55%. The Bank of Canada (BoC) kept interest rates unchanged, as expected,\nthough tweaked the conclusion of its statement, noting heightened concerns\nabout the outlook for growth. The day concluded with H4 price testing, albeit\nmarginally surpassing, the 1.32 handle and settling at 1.3158. In addition to\nthe BoC, the US Federal Reserve cut its benchmark funds rate by 25 basis points\nto a range of 1.5% to 1.75%, as expected, but specified the moves to ease\npolicy could be approaching a pause. <\/p>\n\n\n\n Supporting a technical selloff from\nthe 1.32 handle, chart studies also display a 50.0% retracement ratio at\n1.3194, August\u2019s opening level at 1.3187, a trend line support-turned\nresistance etched from the low 1.3134 and the relative strength index (RSI)\nproducing a hidden bearish divergence signal within overbought territory.<\/p>\n\n\n\n With respect to the higher-timeframe\nlandscape, resistance is not expected to develop until reaching the 50-day SMA\n(blue \u2013 1.3223) and 200-day SMA (orange \u2013 1.3724). Interestingly, though, both\nmoving averages are facing a southerly position at the moment. <\/p>\n\n\n\n Areas of consideration:<\/p>\n\n\n\n In light of the technical confluence supporting 1.32 as resistance on the H4 scale this morning, this could promote further selling today. However, entering at current price places the trader at a slight disadvantage in regards to risk\/reward. Waiting and seeing if price action retests 1.32 a second time may be the alternative, entering on the back of the rejection candle\u2019s structure and targeting a move to 1.31.<\/p>\n\n\n\n USD\/CHF:<\/strong><\/p>\n\n\n\n Broad-based dollar selling on the back\nof recent Fed action weighed on the USD\/CHF Wednesday, consequently forming a\nnear-full-bodied daily bearish candle that closed beneath the 50-day SMA (blue\n\u2013 0.9906). While considered a bearish signal, traders are urged to pencil in\nnearby support surfacing around the 0.9850ish range. <\/p>\n\n\n\n Supply on the weekly timeframe at\n1.0014-0.9892 remains in play, and despite recent selling, still resembles somewhat\nof a fragile tone. The beginning of October witnessed a penetration to the\nouter edge of the supply area\u2019s limit, possibly tripping a portion of buy stops\nand weakening sellers. According to the primary trend, price reflects a\nslightly bullish tone; however, do remain aware we have been rangebound since\nthe later part of 2015 (0.9444\/1.0240). <\/p>\n\n\n\n After crossing beneath 0.99 on the H4\nscale yesterday, the candles ran into an interesting area of support at 0.9852-0.9873\nthis morning. Confirmed by the relative strength index (RSI) testing oversold\nterritory, the pair is likely to bounce <\/em>from here and retest the\nunderside of 0.99. Whether the unit has enough oomph to dethrone 0.99 and push\nfor higher ground remains to be seen in light of daily price driving through\nits 50-day SMA.<\/p>\n\n\n\n Areas of consideration:<\/p>\n\n\n\n Searching for lower-timeframe buying opportunities out of the H4 support area at 0.9852-0.9873, with an upside target set at the 0.99 handle, is certainly an idea worthy of interest this morning. This could simply be a lower-timeframe bullish candlestick configuration, a trend line break\/retest or even a break of resistance. Traders are, however, urged to ensure risk\/reward offers more than a 1:2 ratio to 0.99.<\/p>\n\n\n\n Dow\nJones Industrial Average:<\/strong><\/p>\n\n\n\n US equities firmed Wednesday following\nthe Federal Reserve cutting interest rates, as expected, and signalling it was\nunlikely to move in either direction any time soon as inflation remains muted. The Dow\nJones Industrial Average added 115.27 points, or 0.43%; the S&P 500 advanced\n9.88 points, or 0.33% and the tech-heavy Nasdaq 100 also added 35.60 points, or\n0.44%.<\/p>\n\n\n\n For those who read Wednesday\u2019s\ntechnical briefing you may recall the following points:<\/p>\n\n\n\n Technically, the Dowholds beneath\nH4 resistance at 27086<\/em>, after tunnelling through October\u2019s opening\nlevel fixed at 26947 and trend line resistance pencilled in from the high at\n27321. <\/em><\/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 200-day\nSMA (orange \u2013 26202) face north, with the next upside target set at the weekly\nresistance presented above at 27335.<\/em><\/p>\n\n\n\n Clearance of 27086 on the H4 scale potentially offers an\nearly cue to a move towards the said weekly resistance level. <\/em><\/strong><\/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\n27086 and weekly resistance at 27335 remains of interest this morning. A\ndecisive close beyond 27086 on a H4 basis likely unlocks the door to 27335,\noffering traders potential long opportunities, either on a retest motion at\n27086 or simply entering on the breakout candle\u2019s close.<\/strong> <\/em><\/p>\n\n\n\n Given the mild pullback seen in recent H4 candles and the range of the breakout candle, entering on any retest seen at 27086 may be the better path to explore today (entry\/risk levels can be set according to the rejection candlestick\u2019s structure). <\/p>\n\n\n\n XAU\/USD\n(Gold):<\/strong><\/p>\n\n\n\n The\nyellow metal erased Tuesday\u2019s losses in reasonably robust fashion Wednesday as\ntraders ditched the greenback in favour of bullion. The\nFOMC cut its benchmark funds rate by 25 basis points to a range of 1.5% to\n1.75% on Wednesday, as expected, though specified the moves to ease policy\ncould be approaching a pause. <\/p>\n\n\n\n Technically, gold remains bolstered by\na weekly support area coming in at 1487.9-1470.2. Weekly resistance is seen\nat 1536.9, whereas two layers of weekly support are visible at 1392.0 and 1417.8,\nin the event we eventually push for lower ground. With respect to the\nlonger-term primary trend, gold has been trading northbound since the later\npart of 2015 (1046.5). <\/p>\n\n\n\n Contrary\nto the weekly timeframe, daily price, after forming a bullish outside day\ncandlestick formation, is seen testing the upper edge of a bullish flag (taken\nfrom the high 1557.1). Note a few points north of this angle we also have a\n50-day SMA (blue \u2013 1504.3). The next downside target from this region falls in\nat a support area drawn from 1448.9-1419.9 (also has a 38.2% Fibonacci\nretracement ratio aligning with its top edge at 1448.5 – green). <\/p>\n\n\n\n The\nsupport area at 1481.1-1490.2 stationed on the H4 timeframe held ground\nyesterday, pressuring the H4 candles to trend line support-turned resistance\n(taken from the low 1458.9).<\/p>\n\n\n\n Areas\nof consideration: <\/p>\n\n\n\n In essence, we have weekly price portending a move higher, daily price suggesting we may be heading lower and H4 action undecided between a trend line resistance and support area. Until a break of either of the said H4 areas is seen, trading this market is challenging. Even then, though, space to move is limited with a H4 resistance area lurking nearby at 1519.9-1512.1 and October\u2019s opening level offering possible support at 1472.8.<\/p>\n\n\n\n The accuracy, completeness and\ntimeliness of the information contained on this site cannot be guaranteed. IC\nMarkets does not warranty, guarantee or make any representations, or assume any\nliability regarding financial results based on the use of the information in\nthe site. <\/p>\n\n\n\n News, views, opinions, recommendations\nand other information obtained from sources outside of www.icmarkets.com.au,\nused in this site are believed to be reliable, but we cannot guarantee their\naccuracy or completeness. All such information is subject to change at any time\nwithout notice. IC Markets assumes no responsibility for the content of any\nlinked site. <\/p>\n\n\n\n The fact that such links may exist\ndoes not indicate approval or endorsement of any material contained on any\nlinked site. IC Markets is not liable for any harm caused by the transmission,\nthrough accessing the services or information on this site, of a computer\nvirus, or other computer code or programming device that might be used to\naccess, delete, damage, disable, disrupt or otherwise impede in any manner, the\noperation of the site or of any user\u2019s software, hardware, data or property. <\/p>\n","protected":false},"excerpt":{"rendered":" The Federal Open Market Committee (FOMC) cut its benchmark funds rate by 25 basis points to a range of 1.5% to 1.75% on Wednesday, as expected, but specified the moves to ease policy could be approaching a pause. <\/p>\n","protected":false},"author":1,"featured_media":81071,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[340,215,339,195],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37271"}],"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=37271"}],"version-history":[{"count":1,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37271\/revisions"}],"predecessor-version":[{"id":37281,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37271\/revisions\/37281"}],"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=37271"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/categories?post=37271"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/tags?post=37271"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/www.icmarkets.com\/blog\/wp-content\/uploads\/2019\/10\/2019-10-31-EUR-1024x499.png\")
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