{"id":37342,"date":"2019-11-05T14:38:25","date_gmt":"2019-11-05T03:38:25","guid":{"rendered":"https:\/\/www.icmarkets.com\/blog\/?p=37342"},"modified":"2025-11-17T16:53:15","modified_gmt":"2025-11-17T05:53:15","slug":"tuesday-5th-november-havens-wane-on-positive-trade-deal-hopes","status":"publish","type":"post","link":"https:\/\/www.icmarkets.com\/blog\/tuesday-5th-november-havens-wane-on-positive-trade-deal-hopes\/","title":{"rendered":"Tuesday 5th November: Havens wane on positive trade-deal hopes."},"content":{"rendered":"\n

Key risk events today:<\/strong><\/h3>\n\n\n\n

RBA Rate Statement and Cash Rate; UK\nServices PMI; Canada Trade Balance; US ISM Non-Manufacturing PMI.<\/p>\n\n\n\n

EUR\/USD:<\/strong><\/h3>\n\n\n\n

Europe\u2019s shared currency bowed south against\nits US counterpart Monday, as the dollar index recorded healthy gains.\nShrugging off final EUR Markit manufacturing PMI data which ticked up to 45.9\nfrom 45.7, the EUR\/USD tunnelled through Friday\u2019s low 1.1128 and produced a\ndaily bearish engulfing candle. <\/p>\n\n\n\n

1.11 is seen as the next support on the\nH4 scale, closely shadowed by support at 1.1073. Inside this region, traders\nmay also wish to note daily support plotted at 1.1084, located a few points\nnorth of the 50-day SMA (blue \u2013 1.1039). Despite Monday\u2019s downside move,\ntraders are urged to keep Quasimodo resistance at 1.1187 noted. Not only is\nthis level reasonably strong in its own right, additional resistance is visible\nin the form of a 200-day SMA (orange \u2013 1.1193) and a Fibonacci cluster<\/em>\nbetween 1.1121\/1.1203. <\/p>\n\n\n\n

Long-standing resistance drawn from\n1.1119-1.1295 remains at the forefront of this market on the weekly timeframe,\nwith buyers and sellers squaring off at the underside of the said zone. Increased\nbidding has the upper boundary of a descending channel (1.1169\/1.1569) to\ntarget, whereas a decisive rotation lower could make a run for the lower limit\nof the current descending channel\/the 2016 yearly opening level at 1.0873.<\/p>\n\n\n\n

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

Follow-through selling based off\nyesterday\u2019s daily bearish engulfing candle has the H4 support area between\n1.1073\/1.11 in sight \u2013 includes daily support at 1.1084. As such, risk\/reward\nis unfavourable should protective stop-loss orders be positioned according to the\ndaily candlestick formation. <\/p>\n\n\n\n

Buying from within 1.1073\/1.11 is an\noption today. An ideal entry here is for H4 price to drive through sell stops\nat 1.11 and decisively close back above the figure. Entry on the close of this\ncandle is then a possibility, with protective stop-loss orders plotted either\nbeneath the candlestick\u2019s lower shadow or 1.1073. The initial upside target\nfrom here would likely be set at 1.1163.<\/p>\n\n\n\n

Although unlikely to hit today, 1.12\nalso remains a level worthy of the watchlist for possible shorting\nopportunities. Knowing this barrier merges with 1.1121\/1.1187 on the daily\nscale as well as weekly price trading within a resistance area at 1.1119-1.1295,\n1.12 represents a high-probability sell zone. <\/p>\n\n\n\n

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

GBP\/USD:<\/strong><\/h3>\n\n\n\n

Sterling kicked off the week on the\nbackfoot, driven mostly by dollar gains. Leaving the key figure 1.30\nunchallenged, H4 price concluded the session driving through sell stops at the\n1.29 handle. To the left of current price, limited demand is visible \u2013 note\n1.2845 and 1.2806 (black arrows) resemble possible consumption tails \u2013 until\nreaching potential support off the 1.28 region.<\/p>\n\n\n\n

With respect to the bigger picture this\nmorning weekly structure remains unchanged from Monday\u2019s technical briefing:<\/p>\n\n\n\n

Following the break of the 2019 yearly\nopening level at 1.2739, price action on the weekly timeframe has entered a\nsomewhat indecisive phase over the past two weeks. A retest at 1.2739 or\nadditional upside towards supply at 1.3472-1.3204\/long-term trend line\nresistance etched from the high 1.5930 is certainly a possibility on this scale\ngoing forward.<\/em><\/p>\n\n\n\n

The immediate trend faces a downward\ntrajectory from 1.4376, with a break of the 1.1904 low (labelled potential\nsupport) confirming the larger downtrend from 1.7191.<\/em><\/p>\n\n\n\n

In terms of daily price, however, the\nsmall area of resistance at 1.3019-1.2975, which aligns with the 161.8%\nFibonacci ext. point at 1.2978, forced a retest of channel resistance-turned\nsupport (extended from the high 1.2582) yesterday. Quasimodo resistance plotted\nat 1.3102 is considered the next port of call beyond 1.3019-1.2975, whereas below\nthe said channel support, support resides close by at 1.2769, closely shadowed\nby the 200-day SMA (orange \u2013 1.2706).<\/p>\n\n\n\n

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

The break of 1.29 has potentially set\nthe technical stage for a bearish theme, according to H4 structure, targeting\n1.28. A retest at the underside of 1.29 this morning, preferably in the shape\nof a H4 bearish candlestick formation (entry and risk can be set based on this structure),\ncould, therefore, be something to keep an eye out for. Ideally, though, before\nshorts are considered, a daily close beneath the daily timeframe\u2019s channel\nresistance-turned support (extended from the high 1.2582) is needed. <\/p>\n\n\n\n

Beneath 1.28, shaded in grey, the\n1.2739\/1.2769 area is also likely of interest as potential support this week,\nmade up of weekly and daily supports highlighted above. This area marks an\nideal location to bounce from in the event of a fakeout beyond 1.28.<\/p>\n\n\n\n

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

AUD\/USD:<\/strong><\/h3>\n\n\n\n

Despite a miss on Australia retail sales\ndata (0.2% vs. expected 0.4%), which initially weighed on the commodity-linked\ncurrency, the AUD\/USD gathered momentum in Asia on Monday, though topped at\nhighs of 0.6224, in the form of a H4 bearish outside candlestick signal going into\nLondon. US trade saw a break of 0.69 form, largely driven by USD strength, and\na test of support at 0.6883, which aligns with trend line support taken from\nthe low 0.6723, enter the mix.<\/p>\n\n\n\n

On a wider perspective, weekly price is seen toying with the upper edge of its consolidation zone between 0.6894\/0.6677 (light grey). Buying could see the 2019 yearly opening level at 0.7042 enter the fray, though do remain cognizant of the primary downtrend which has essentially been in play since early 2018.<\/p>\n\n\n\n

Before pressing for higher ground on the weekly timeframe, daily traders must contend with a swing resistance plotted at 0.6910, a trend line resistance (extended from the high 0.7393) and a 200-day SMA (orange \u2013 0.6951). The 50-day SMA (blue \u2013 0.6803) currently faces northbound, while the said 200-day SMA still points south.<\/a> It may also interest some traders that a violation of the 200-day SMA potentially clears the runway for an advance towards Quasimodo resistance at 0.7047, closely followed by another layer of resistance priced in at 0.7062 (set nearby the 2019 yearly opening level on the weekly timeframe at 0.7042).<\/p>\n\n\n\n

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

The H4 trend line support taken from the\nlow 0.6723 and support at 0.6883, along with an ABCD correction (black arrows)\ncould provide enough impetus to press higher. Traders are urged to wait and see\nif the H4 candles can decisively reclaim +0.69 status before committing funds,\nhowever, since entering long here goes against daily resistance mentioned above\nat 0.6910\/trend line resistance. <\/p>\n\n\n\n

Failing a push higher, a H4 close\nbeneath H4 trend line support mentioned above at 0.6723 is likely to be viewed\nas a bearish indicator, targeting H4 support coming in at 0.6809. As such,\nshorts beyond the said trend line support are also a consideration today. <\/p>\n\n\n\n

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

USD\/JPY:<\/strong><\/h3>\n\n\n\n

Safe-haven assets largely traded lower\nMonday amid positive trade updates from both China and the EU. USD\/JPY flow\nadded more than 40 points, or 0.38%, consequently extending Friday\u2019s recovery\noff the 108 handle, which happened to unite with a notable trend line support\nextended from the low 104.44 and October\u2019s opening level at 108.07.<\/p>\n\n\n\n

<\/p>\n\n\n\n

The next upside target on the H4 scale\nforms at the 109 neighbourhood. Note this level also benefits from daily\nresistances between 109.17\/108.99 (comprised of a resistance level at 109.17,\nthe 200-day SMA [orange\/109.03 \u2013 seen flattening] and Quasimodo resistance at\n108.99).<\/p>\n\n\n\n

With reference to the weekly timeframe,\nlast week\u2019s bearish engulfing candlestick pattern has yielded zero interest to\nthe downside so far. Further buying from this point could see the unit rally as\nfar north as the 2019 yearly opening level at 109.68 and a 127.2% Fibonacci\next. point at 109.56 (taken from the low 104.44).<\/p>\n\n\n\n

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

109 on the H4 is potentially eyed as\npossible resistance this morning, having noted it aligns with daily resistance.\nThe threat of further upside on the weekly timeframe, however, is likely of\nconcern to some traders, therefore, waiting for additional H4 candlestick\nconfirmation \u2013 think bearish engulfing formations and shooting star patterns \u2013\nto develop may be an option. Although not guaranteeing a successful trade, it\ndoes help identify seller intent and provides entry and risk levels to work\nwith. <\/p>\n\n\n\n

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

USD\/CAD:<\/strong><\/h3>\n\n\n\n

USD\/CAD prices enter Tuesday mostly\nunchanged, as a healthy advance in WTI bolstered the Canadian dollar against US\ndollar upside. Considering yesterday\u2019s lacklustre performance, much of the\nfollowing report will echo thoughts aired from Monday\u2019s technical briefing.<\/p>\n\n\n\n

From the weekly timeframe:<\/p>\n\n\n\n

Snapping a three-week losing streak and\nreclaiming all the prior week\u2019s losses, weekly flow rebounded from trend line\nsupport (extended from the low 1.2061) in reasonably strong fashion last week.\nAdditional upside from this point has tops around 1.3342 in sight, closely\nfollowed by the 2017 yearly opening level at 1.3434 and trend line resistance\ntaken from the peak at 1.3661.<\/em><\/p>\n\n\n\n

A violation of the aforementioned trend\nline support exposes Quasimodo support at 1.2887.<\/em><\/p>\n\n\n\n

Daily timeframe:<\/p>\n\n\n\n

Supply at 1.3239-1.3199 entered the fold\nWednesday and held into the close, with Friday producing an impressive downside\nrotation. Intersecting with this area is the 50-day SMA (blue \u2013 1.3215), with\nthe 200-day SMA (orange \u2013 1.3273) positioned a few points above. <\/em><\/p>\n\n\n\n

With both SMAs pointing south, last Tuesday\u2019s\nlow at 1.3042 could be targeted this week, set a few points north of support at\n1.3018.<\/em><\/p>\n\n\n\n

H4 timeframe:<\/p>\n\n\n\n

USD\/CAD movement remains capped beneath\na familiar resistance area between 1.32\/1.3187 (comprised of a 50.0%\nretracement ratio at 1.3194, August\u2019s opening level at 1.3187 and a trend line\nsupport-turned resistance etched from the low 1.3134. Note this area also unites\nwith the underside of daily supply mentioned above at 1.3239-1.3199. <\/em><\/p>\n\n\n\n

Traders who read Friday\u2019s technical\nbriefing may recall the following piece:<\/em><\/p>\n\n\n\n

In light of the technical confluence\nsupporting 1.32 as resistance on the H4 scale, this could promote further\nselling. However, entering at current price places the trader at a slight\ndisadvantage in regards to risk\/reward. Waiting and seeing if price action\nretests 1.32 a second time may be the alternative, entering on the back of the\nrejection candle\u2019s structure and targeting a move to 1.31.<\/em><\/p>\n\n\n\n

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

Outlook unchanged.<\/strong><\/p>\n\n\n\n

Well done to any readers who managed to\nshort 1.32\/1.3187 on the H4 scale. Reducing risk to breakeven and liquidating a\nportion of the position is certainly an option now. This helps protect against\nthe possibility of buying on the weekly scale off trend line support. <\/em><\/p>\n\n\n\n

Continued selling on the H4 timeframe,\nnevertheless, highlights 1.31 as the next downside target, which despite weekly\nprice suggesting higher prices, is backed by daily price exhibiting scope to\npress lower from supply mentioned above at 1.3239-1.3199.<\/em><\/p>\n\n\n\n

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

USD\/CHF:<\/strong><\/h3>\n\n\n\n

USD\/CHF activity snapped a four-week\nlosing streak Monday amid upbeat sentiment, adding more than 20 points, or\n0.23%. <\/p>\n\n\n\n

The H4 support area at 0.9852-0.9873,\nalthough recently suffered a mild breach, remains in the fight with trade\napproaching September\u2019s opening level at 0.9896, closely trailed by the 0.99\nhandle. A violation of 0.99 has trend line resistance etched from the high\n1.0027 to target, whereas a move beneath 0.9852-0.9873 could lead to price\ntackling the 0.98 handle.<\/p>\n\n\n\n

The story on the bigger picture,\nnonetheless, has weekly price shaking hands with the underside of familiar\nsupply at 1.0014-0.9892. An upside move out of the said supply may draw in\nQuasimodo resistance at 1.0124, while downside has the 2018 yearly opening\nlevel at 0.9744 in view. According to the primary trend, price also reflects a\nslightly bullish tone; however, do remain aware we have been rangebound since the\nlater part of 2015 (0.9444\/1.0240). <\/p>\n\n\n\n

Supporting a bearish theme out of the\ncurrent weekly supply is daily action currently in the process of completing a\nbearish head and shoulder\u2019s formation out of a resistance area at 1.0010-0.9986.\nThe break of the neckline <\/em>taken from the 0.9843 September 24 low (blue\nline) needs to be engulfed before this pattern is tradeable, with an optimal\ndownside target present at Quasimodo support fixed from 0.9692.<\/p>\n\n\n\n

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

Based on the three timeframes analysed\nabove, a reasonably strong bearish tone remains present, despite recent upside.\nIdeally, the 0.99 handle should hold as resistance and force a move lower.\nTherefore, this could be a location to search for shorting opportunities.<\/p>\n\n\n\n

Ultimately, though, traders are likely\nwatching for a daily close below the head and shoulders neckline (0.9843)\nbefore committing funds to a short position. A decisive H4 close below the\nsupport area at 0.9852-0.9873 will potentially be viewed as an early cue,\nhowever. Therefore, aggressive traders may look to begin loading up on shorts\nat this point, and pyramiding positions on a break of the head and shoulder\u2019s\nneckline. <\/p>\n\n\n\n

The first downside target for shorts\nfalls in at 0.98, though according to weekly price, 0.9744 is a possibility,\nfollowed by daily Quasimodo support at 0.9692.<\/p>\n\n\n\n

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

Dow Jones Industrial Average:<\/strong><\/h3>\n\n\n\n

The Dow Jones industrial average joined\nmajor US stock indexes at record highs Monday, rising on positive trade-deal\nhopes. The\nDow Jones industrial average added 114.75 points, or 0.42%; the S&P 500 advanced\n11.36 points, or 0.37% and the tech-heavy Nasdaq 100 closed higher by 49.50\npoints, or 0.61%. <\/p>\n\n\n\n

Technically,\nwe\u2019re in unchartered territory right now, with little stopping a run higher. With\nweekly resistance at 27335, along with the previous all-time high 27388, both\nlikely to serve as support going forward, further buying is a strong\npossibility. <\/p>\n\n\n\n

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

Weekly support at 27335 is central to\ntoday\u2019s outlook. A retest of this level, preferably by way of a H4 bullish\ncandlestick formation (entry and risk can then be set according to this\nstructure), is likely enough to entice buyers into the market. Once\/if the\ntrade moves in favour, trailing the position behind swing lows is an option. <\/p>\n\n\n\n

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

XAU\/USD (GOLD):<\/strong><\/h3>\n\n\n\n

As highlighted in Monday\u2019s technical\nbriefing, the H4 candles have been busy carving out a consolidation\nbetween a support area coming in at 1481.1-1490.2 and a resistance zone at 1519.9-1512.1\nsince early October. Note last week concluded at the top edge of the said\nrange. Outside of this consolidation, nearby resistance resides in the form of\nSeptember\u2019s opening level at 1526.2, whereas below we have October\u2019s opening\nlevel pencilled in from 1472.8. <\/p>\n\n\n\n

Technically\nspeaking, a breakout higher is the more likely route on the H4, considering the\nhigher-timeframe\u2019s picture. <\/p>\n\n\n\n

Weekly price recorded its third\nsuccessive week in positive terrain, bolstered by a familiar support area at\n1487.9-1470.2. Resistance is seen at 1536.9, whereas two layers of support are\nvisible at 1392.0 and 1417.8, in the event we eventually push for lower ground.\nWith respect to the longer-term primary trend, gold has been trading northbound\nsince the later part of 2015 (1046.5).<\/p>\n\n\n\n

Daily\nprice brushed aside the upper edge of a bullish flag (taken from the high\n1557.1) and the 50-day SMA (blue \u2013 1504.3) last Thursday, supporting longs off\nthe weekly support area mentioned above at 1487.9-1470.2. The next upside\ntarget from this region falls in at the 1535.6 September 24 high, closely\nshadowed by resistance at 1550.4, as price retests the said 50-day SMA as\nsupport.<\/p>\n\n\n\n

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

Having\nnoted higher-timeframe action is poised to move higher, selling the top edge of\nthe current H4 range at 1519.9-1512.1, despite the area holding a number of\ntimes in the past, is considered chancy. <\/p>\n\n\n\n

An\nalternative is to simply enter long at current price, basing the setup on a H4\nbullish candlestick signal off the 50-day SMA, in anticipation of further\nupside. In that case, keep eyes on September\u2019s opening level at 1526.2 as\npossible resistance.<\/p>\n\n\n\n

More\nconservative traders, on the other hand, may wait for a breakout north above\n1526.2 to occur. While a break higher may be appealing, this leaves little room\nfor manoeuvre to weekly resistance mentioned above at 1536.9. <\/p>\n\n\n\n

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

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Key risk events today: RBA Rate Statement and Cash Rate; UK […]<\/p>\n","protected":false},"author":7,"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\/37342"}],"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\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/comments?post=37342"}],"version-history":[{"count":5,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37342\/revisions"}],"predecessor-version":[{"id":81339,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37342\/revisions\/81339"}],"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=37342"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/categories?post=37342"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/tags?post=37342"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}