{"id":37361,"date":"2019-11-06T14:41:00","date_gmt":"2019-11-06T03:41:00","guid":{"rendered":"https:\/\/www.icmarkets.com\/blog\/?p=37361"},"modified":"2025-11-17T16:53:09","modified_gmt":"2025-11-17T05:53:09","slug":"wednesday-6th-november-dollar-circulates-below-98-00-eyes-weekly-trend-line-resistance","status":"publish","type":"post","link":"https:\/\/www.icmarkets.com\/blog\/wednesday-6th-november-dollar-circulates-below-98-00-eyes-weekly-trend-line-resistance\/","title":{"rendered":"Wednesday 6th November: Dollar circulates below 98.00; eyes weekly trend line resistance."},"content":{"rendered":"\n

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

Crude Oil Inventories.<\/p>\n\n\n\n

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

In recent sessions, the euro, shaped by way of a near-full-bodied daily bearish candle, fell to a three-week low vs. the buck. The dollar reigned supreme, bolstered by a promising ISM non-manufacturing PMI print and the continuation of positive trade rhetoric between the US and China. According to Institute for Supply Management, the non-manufacturing PMI registered 54.7%, which is 2.1 percentage points above the September reading of 52.6%. This represents continued growth in the non-manufacturing sector, at a faster rate.<\/em><\/p>\n\n\n\n

Technically\nspeaking, sellers show promise at the underside of the current weekly\nresistance area drawn from 1.1119-1.1295, with a run for the lower limit of the\ncurrent descending channel\/the 2016 yearly opening level at 1.0873 certainly a\npossibility. <\/p>\n\n\n\n

Daily\nsupport at 1.1084 was mildly engulfed Tuesday, exposing the 50-day SMA (blue \u2013\n1.1038) which appears to have begun flattening. Beyond this line, limited\nsupport is visible until the unit crosses paths with familiar demand at 1.0851-1.0950,\nwhich houses the 2016 yearly opening level mentioned at 1.0873, mentioned above\non the weekly timeframe.<\/p>\n\n\n\n

Across\nthe page on the H4 timeframe, a clear double-top formation has taken shape after\nbreaking the 1.1073 October 24 low (the confirmation point). The next downside\ntarget on this scale can be seen at the 1.10 handle, sited close by September\u2019s\nopening level at 1.0989 and a 61.8% Fibonacci retracement ratio at 1.0994.<\/p>\n\n\n\n

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

All three timeframes reflect a somewhat\nbearish vibe this morning. The confirmation of the H4 double-top pattern, reinforced\nby a weekly resistance area at 1.1119-1.1295 as well as daily support recently\ngiving way at 1.1084, is likely enough to entice sellers towards the 1.10\nneighbourhood.<\/p>\n\n\n\n

Traders considering a short based on the\nH4 double top pattern may already be in the market; others, however, may wait and\nsee if a retest at 1.11 forms before pulling the trigger. The latter offers a\nbetter price, and therefore more favourable risk\/reward.  <\/p>\n\n\n\n

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

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

The British pound concluded unmoved\nagainst the US dollar Tuesday, ranging no more than 50 points on the day. GBP\/USD\nmovement, however, did clock a session high at 1.2917 shortly after the release\nof UK Services PMI. According to Markit, the seasonally adjusted IHS\nMarkit\/CIPS UK Services PMI Business Activity Index ticked up to 50.0 in\nOctober, from September’s 49.5, signalling no change in service sector output.\nThe latest figure was among the lowest registered in the past ten-and-a-half\nyears, and below each of the trend levels for the first, second and third\nquarters of 2019 (50.1, 50.5 and 50.5 respectively).<\/em><\/p>\n\n\n\n

The technical landscape on GBP\/USD is\ninteresting. Recall in Tuesday\u2019s technical briefing the piece highlighted the\nfollowing on the H4 timeframe:<\/p>\n\n\n\n

Leaving\nthe key figure 1.30 unchallenged, H4 price concluded the session driving\nthrough sell stops at the 1.29 handle. To the left of current price, limited\ndemand is visible \u2013 note 1.2845 and 1.2806 (black arrows) resemble possible\nconsumption tails \u2013 until reaching potential support off the 1.28 region.<\/em><\/p>\n\n\n\n

And\u2026<\/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\nstructure), could, therefore, be something to keep an eye out for.<\/em><\/p>\n\n\n\n

As evident from the H4 timeframe, price\nretested the underside of 1.29 Tuesday and produced a notable shooting star candlestick\nsignal (considered a bearish signal) and is so far holding ground. <\/p>\n\n\n\n

The only grumble, nonetheless, is higher-timeframe\nstructure, specifically the daily timeframe trading at channel support:<\/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. The immediate trend faces a downward trajectory from 1.4376,\nwith a break of the 1.1904 low (labelled potential support) confirming the\nlarger downtrend from 1.7191.<\/em><\/p>\n\n\n\n

In terms of daily price, the small area\nof resistance at 1.3019-1.2975, which aligns with the 161.8% Fibonacci ext.\npoint at 1.2978, forced a retest of channel resistance-turned support (extended\nfrom the high 1.2582). Quasimodo resistance plotted at 1.3102 is considered the\nnext port of call beyond 1.3019-1.2975, whereas below the said channel support,\nsupport resides close by at 1.2769, closely shadowed by the 200-day SMA (orange\n\u2013 1.2706).<\/em><\/p>\n\n\n\n

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

Whether the H4 shooting star candlestick\nconfiguration was enough evidence to sell is, of course, trader dependent. Some\nlikely feel it was sufficient, given weekly price showing room to press lower;\nothers may feel it may be better to wait for a daily close beneath the daily\nchannel support to form before committing funds. <\/p>\n\n\n\n

Irrespective of the entry measure, 1.28\nrepresents an initial take-profit target. <\/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, made up of\nweekly and daily supports highlighted above. This area marks an ideal location\nto 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

Early Asia Tuesday witnessed the Reserve Bank of Australia (RBA) stand pat on policy at 75bps, as expected. The statement was largely unchanged and maintained its easing bias. An advance ensued, nonetheless, drawing the market to highs of 0.6928 into London hours. <\/p>\n\n\n\n

Heading\ninto London\u2019s afternoon session, nevertheless, sellers strengthened their grip,\nreinforced on the back of healthy USD buying. The day wrapped up a shade\nhigher, with AUD\/USD stationed a touch beneath its 0.69 handle, though remains bolstered\nby H4 trend line support extended from the low 0.6723. Note we also have\nfamiliar support sited nearby at 0.6883.<\/p>\n\n\n\n

With\nrespect to the bigger picture, structure remains unchanged from Tuesday\u2019s\ntechnical briefing:<\/p>\n\n\n\n

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.<\/em><\/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 0.6950). The 50-day SMA (blue \u2013 0.6806) currently faces northbound, while the said 200-day SMA still points south. 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).<\/em><\/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 could, once again, provide enough impetus to\npress higher today. However, failure to push to fresh highs yesterday likely casts\ndoubt here.<\/p>\n\n\n\n

Failing a push higher, a H4 close\nbeneath H4 trend line support mentioned above at 0.6723\/support at 0.6883 will possibly\nbe viewed as a bearish indicator, targeting H4 support coming in at 0.6809\/trend\nline support etched from the low 0.6670. As such, shorts beyond the said H4\nsupport at 0.6883 are a consideration today. Conservative traders may opt to\nwait and see if a retest forms prior to pulling the trigger, though, as this\nhelps identify seller intent as well as providing additional entry and risk\nlevels to work with. <\/p>\n\n\n\n

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

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

A further unwind out of safe-haven\nassets took form Tuesday, extending the USD\/JPY\u2019s three-day ascent to highs of\n109.25. The move saw orders at 109 give way, though recent hours has seen the\npair recede and retest 109 as support. Indicator-based traders may also wish to\nnote the relative strength index (RSI) recently exited overbought territory. <\/p>\n\n\n\n

On more of a broader perspective,\ntechnicians likely have their crosshairs fixed on daily resistance priced in at\n109.17, which aligns closely with the 200-day SMA (orange \u2013 109.02). 109.17, by\nand of itself is a key level, boasting significant history. Higher up on the\ncurve, nonetheless, we have weekly price threatening a move to the 2019 yearly\nopening level at 109.68 and a 127.2% Fibonacci ext. point at 109.56 (taken from\nthe low 104.44).<\/p>\n\n\n\n

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

109 on the H4 is a key barrier this\nmorning. <\/p>\n\n\n\n

A decisive rejection off 109 suggests weakness\naround daily resistance mentioned above at 109.17 and a potential run to the 2019\nyearly opening level at 109.68 on the weekly scale. A close above 109.17 on a\nH4 closing basis is likely sufficient to consider a bullish theme.<\/p>\n\n\n\n

A violation of 109, on the other hand, helps\nvalidate a downside bias from daily resistance at 109.17 and perhaps clears the\nrunway south to H4 trend line support pencilled in from the low 104.44,\nfollowed by October\u2019s opening level at 108.07\/the 1.08 handle. A H4 close\nbeneath 109 followed up with a retest that holds is likely enough to attract\nsellers into the market. <\/p>\n\n\n\n

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

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

On the one hand, the greenback received\na boost on the back of a promising ISM non-manufacturing PMI print, though on\nthe other hand, crude oil prices rallied and bolstered the Canadian dollar. USD\/CAD\naction ended the day mostly unmoved, despite ranging from a high of 1.3178 and\na low of 1.3115.<\/p>\n\n\n\n

Considering yesterday\u2019s lacklustre\nperformance, technical structure remains unchanged. As a result, much of the\nfollowing analysis will represent thoughts aired in recent writing.<\/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. A violation of the aforementioned trend line\nsupport exposes Quasimodo support at 1.2887.<\/em><\/p>\n\n\n\n

Daily supply at 1.3239-1.3199 entered\nthe fold last week, with Friday producing an impressive downside rotation.\nIntersecting with this area is the 50-day SMA (blue \u2013 1.3212), with the 200-day\nSMA (orange \u2013 1.3273) positioned a few points above. With both SMAs pointing\nsouth, last Tuesday\u2019s low at 1.3042 could be targeted, set a few points north\nof support at 1.3018.<\/em><\/p>\n\n\n\n

USD\/CAD movement remains capped beneath\na familiar resistance area between 1.32\/1.3187 on the H4 scale (comprised of a\n50.0% retracement ratio at 1.3194, August\u2019s opening level at 1.3187 and a trend\nline support-turned resistance etched from the low 1.3134. Note this area also\nunites with the underside of daily supply mentioned above at 1.3239-1.3199. <\/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 (a noted setup to watch in previous reports).\nReducing risk to breakeven and liquidating a portion of the position is\ncertainly an option now. This helps protect against the possibility of buying\non 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.<\/em><\/p>\n\n\n\n

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

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

The US dollar accelerated its recovery\nagainst the Swiss franc Tuesday, boosted by upbeat US ISM non-manufacturing and\ntrade deal optimism. <\/p>\n\n\n\n

The technical setting on USD\/CHF this\nmorning has the H4 candles firm above the 0.99 handle and challenging trend\nline resistance extended from the high 1.0027. A violation of this structure\nimplies a possible move to the 0.9970 October 28 high, closely trailed by\nOctober\u2019s opening level at 0.9977. It may also interest some traders to note\nthe relative strength index (RSI) is seen nearing overbought terrain. <\/p>\n\n\n\n

With reference to the higher timeframes,\nsupply at 1.0014-0.9892 on the weekly timeframe has remained at the forefront\nof this market since early September. An upside move out of the said supply may\ndraw in Quasimodo resistance at 1.0124, while downside has the 2018 yearly\nopening level at 0.9744 in view. According to the primary trend, price reflects\na slightly 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

Daily flow recently crossed back above\nthe 50-day SMA (blue \u2013 0.9915), consequently exposing the 200-day SMA (orange \u2013\n0.9953), followed by a nearby area of familiar resistance at 1.0010\/0.9986.<\/p>\n\n\n\n

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

With the 200-day SMA lurking at 0.9953,\na move higher to this line is highly likely, therefore engulfing the current H4\ntrend line resistance. For that reason, tread carefully shorting this barrier\ntoday. <\/p>\n\n\n\n

The green area on the H4 scale between\n1.0000 (parity), Quasimodo resistance at 0.9989 and October\u2019s opening level at\n0.9977 is likely of interest for shorts. Not only is it positioned within the walls\nof the current weekly supply, the H4 zone is also glued to the underside of the\nnoted daily resistance area. <\/p>\n\n\n\n

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

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

Major US equity benchmarks hovered near\nrecord highs Tuesday before closing mostly lower, as investors digested the\nlatest earnings and economic data. The Dow Jones industrial average added 30.52\npoints, or 0.11%; the S&P 500 lost 3.65 points, or 0.12% and the tech-heavy\nNasdaq 100 closed unchanged.<\/p>\n\n\n\n

The\nDow registered an all-time high of 27498 Tuesday, though closed in the shape of\na daily shooting star candlestick formation (considered a bearish signal). With\nlittle stopping the index from exploring higher ground, the bearish candlestick\nmotion might just be enough to force a retest at weekly support coming in at\n27335.<\/p>\n\n\n\n

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

Outlook unchanged.<\/strong><\/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. <\/em><\/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. Outside of this consolidation, nearby resistance resides\nin the form of September\u2019s opening level at 1526.2, whereas below we have October\u2019s\nopening level pencilled in from 1472.8. <\/p>\n\n\n\n

In\nrecent movement, the yellow metal experienced its largest single-day decline\nsince late September amid an unwind of safe-haven assets. H4 price remains\ncontained within the aforementioned range, though is seen testing the lower\nboundary, as we write. Additionally, the relative strength index (RSI) is seen\ntesting oversold territory. <\/p>\n\n\n\n

Weekly price trades back at the top edge\nof a familiar support area at 1487.9-1470.2, thanks to yesterday\u2019s descent.\nResistance is seen at 1536.9, whereas two layers of support are visible at\n1392.0 and 1417.8, in the event we navigate 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

Daily\nprice forced its way back within the walls of a bullish flag (1557.1\/1484.6)\nyesterday and tunnelled through the 50-day SMA (blue \u2013 1501.6). Increased\nselling has a support area priced in at 1448.9-1419.9 in view, which happens to\nalign closely with a 38.2% Fibonacci retracement ratio at 1448.5.<\/p>\n\n\n\n

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

Technically,\nthe expectation on the H4 timeframe is a recovery from the lower edge of its\nrange, though a whipsaw to October\u2019s opening level at 1472.8 is not out of the\nquestion. Although buying is bolstered by the fact we\u2019re also coming off a\nweekly support area, daily price must, once again, contend with the upper edge\nof the daily bullish flag and 50-day SMA. As such, buying may be problematic.<\/p>\n\n\n\n

In\nthe absence of clearer price action, opting to remain on the side lines may be\nthe better path to explore. <\/p>\n\n\n\n

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

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Key risk events today: Crude Oil Inventories. EUR\/USD: In recent sessions, […]<\/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\/37361"}],"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=37361"}],"version-history":[{"count":4,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37361\/revisions"}],"predecessor-version":[{"id":81338,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37361\/revisions\/81338"}],"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=37361"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/categories?post=37361"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/tags?post=37361"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}