{"id":37388,"date":"2019-11-08T14:57:46","date_gmt":"2019-11-08T03:57:46","guid":{"rendered":"https:\/\/www.icmarkets.com\/blog\/?p=37388"},"modified":"2025-11-17T16:52:56","modified_gmt":"2025-11-17T05:52:56","slug":"friday-8th-november-dollar-index-closes-above-98-00-though-faces-weekly-trend-line-resistance","status":"publish","type":"post","link":"https:\/\/www.icmarkets.com\/blog\/friday-8th-november-dollar-index-closes-above-98-00-though-faces-weekly-trend-line-resistance\/","title":{"rendered":"Friday 8th November: Dollar index closes above 98.00 though faces weekly trend line resistance."},"content":{"rendered":"\n

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

Canada Employment Change and\nUnemployment Rate; US Prelim UoM Consumer Sentiment; FOMC Member Williams and Brainard\nSpeak.<\/p>\n\n\n\n

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

The European shared currency traded lower against the buck Thursday, erasing more than 0.15% and recording its fourth successive losing session. The dollar index firmed yesterday, breaching 98.00 to the upside as US Treasury yields rose sharply \u2013 10-year note trades at 1.919% \u2013 amid positive US\/China trade headlines that triggered safe-haven outflows.<\/p>\n\n\n\n

EUR\/USD\nprice action on the H4 scale extended losses south of the 1.11 handle, clocking\nlows at 1.1036 \u2013 levels not seen since mid-October. <\/p>\n\n\n\n

As\nunderscored in Wednesday\u2019s technical research<\/strong>, a distinct\ndouble-top pattern has formed (peaks plotted at 1.1179\/1.1175) after breaking\nthe 1.1073 October 24 low (the confirmation point). Some technicians would\nlabel the peaks as an \u2018eve and eve\u2019 formation, considered to be a\nhigher-probability pattern. The next downside target on this scale can be seen\nat the 1.10 handle, sited close by September\u2019s opening level at 1.0989 and a\n61.8% Fibonacci retracement ratio at 1.0994.<\/em><\/p>\n\n\n\n

On\nmore of a broader outlook, sellers show promise at the underside of the current\nweekly resistance area drawn from 1.1119-1.1295. Further downside from this\npoint could make a run for the lower limit of the descending channel taken from\nthe low 1.1109\/the 2016 yearly opening level at 1.0873. <\/em><\/p>\n\n\n\n

Upside\nattempts on the daily timeframe remain capped by resistance at 1.1084. Yesterday\u2019s\nmove, however, drew in the 50-day SMA (blue \u2013 1.1039) which appears to have\nbegun turning to the upside. Beyond this line, limited support is visible until\ncrossing paths with familiar demand at 1.0851-1.0950 \u2013 houses the 2016 yearly\nopening level mentioned above on the weekly timeframe at 1.0873.<\/p>\n\n\n\n

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

Traders short the H4 double top pattern\nlikely have their crosshairs firmly fixed on the 50-day SMA today. A break of\nthis line, according to our technical studies, confirms the downside bias. The initial\ntake-profit target, as underscored above, is set around the key figure 1.10.\nConsidering its local confluence (sited close by September\u2019s opening level\nat 1.0989 and a 61.8% Fibonacci retracement ratio at 1.0994<\/em>), active buying\nis expected. However, with higher-timeframe structure suggesting a move to as\nlow as the top edge of daily demand plotted at 1.0950, an intraday bounce is the\nexpectation. <\/p>\n\n\n\n

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

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

The British pound navigated lower ground\nversus the US dollar Thursday, shedding more than 40 points, or 0.33%. The Bank\nof England (BoE) left interest rates unchanged at 0.75%, as expected, though policy\nmakers voted 7-2 to keep borrowing costs on hold this month, with the surprise\ndissent prompting a slide in the pound. <\/p>\n\n\n\n

Tuesday\u2019s retest at the underside of\n1.29 on the H4 timeframe, shaped by way of a shooting star candlestick\nformation (considered a bearish signal), shook hands with its initial\ntake-profit target yesterday: the 1.28 handle. Well done to any readers who managed\nto take advantage of this move. <\/p>\n\n\n\n

Downside found additional support Wednesday\nafter the daily channel resistance-turned support (extended from the high\n1.2582) gave way, consequently exposing daily support pencilled in at 1.2769,\nclosely shadowed by the 200-day SMA (orange \u2013 1.2702).<\/p>\n\n\n\n

With respect to the weekly timeframe, price\naction has entered a somewhat indecisive phase over the past three weeks. A\nretest at 1.2739 \u2013 the 2019 yearly opening level \u2013 or additional upside towards\nsupply at 1.3472-1.3204\/long-term trend line resistance etched from the high\n1.5930 is certainly something to keep an eye out for, however. The immediate\ntrend faces a downward trajectory from 1.4376, with a break of the 1.1904 low\n(labelled potential support) confirming the larger downtrend from 1.7191.<\/p>\n\n\n\n

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

With 1.28 recently entering the mix,\nshort sellers have likely liquidated a large portion of their positions.<\/p>\n\n\n\n

Beneath 1.28, shaded in grey, the\n1.2739\/1.2769 area is possibly of interest today as support (and a final\ntake-profit target for shorts), made up of weekly and daily supports\nhighlighted above. <\/p>\n\n\n\n

A bounce from 1.2739\/1.2769 followed up\nwith a break back above 1.28 on a H4 closing basis could entice buyers into the\nmarket. Entry on the close of the candle is then an option, with protective\nstop-loss orders either plotted beneath 1.2739 or the lower shadow of the\nbreakout candle. <\/p>\n\n\n\n

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

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

Upbeat trade headlines suggesting the US and China agreed to roll back tariffs at an equally gradual pace as part of the phase-one trade deal witnessed antipodeans gather strength Thursday.<\/p>\n\n\n\n

AUD\/USD\nprice action settled a touch beneath the 0.69 handle, capped by a trend line\nsupport-turned resistance extended from the low 0.6723. Pressing higher from\nhere has tops set around the 0.6928 neighbourhood, followed by H4 resistance\npriced in at 0.6957.<\/p>\n\n\n\n

More\nbroadly, however, as highlighted in previous reports, weekly price is seen\ntoying with the upper edge of its consolidation zone between 0.6894\/0.6677\n(light grey). Buying could see the 2019 yearly opening level at 0.7042 enter\nthe fray, though do remain cognisant of the primary downtrend which has\nessentially been in play since early 2018.<\/em><\/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 0.6946). The 50-day SMA (blue \u2013 0.6813) 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

With buyers and sellers squaring off\naround the 0.69 region this morning, technical studies suggest sellers have the\nupper hand, in terms of resistance structure on all three timeframes analysed\nabove. Should a notable H4 bearish candlestick signal form from 0.69 today,\nthis may encourage a run lower, targeting yesterday\u2019s session low at 0.6861,\nfollowed by H4 support coming in at 0.6809\/trend line support etched from the\nlow 0.6670. <\/p>\n\n\n\n

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

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

In recent sessions, the market witnessed\nthe US dollar index, or DXY, take to higher ground and puncture its 98.00 band.\nAdditionally, US Treasury yields bumped higher with the 10-year note trading at\n1.919%. In terms of trade headlines, the US and China have reportedly agreed to\nroll back tariffs at an equally gradual pace as part of the phase-one trade\ndeal.<\/p>\n\n\n\n

Trade optimism dented demand for safe-haven\nassets Thursday, consequently guiding the USD\/JPY northbound and breaking the\n109 handle to highs of 109.48. The next upside hurdle on the H4 timeframe falls\nin around Quasimodo resistance at 109.74 (not visible on the screen). <\/p>\n\n\n\n

With the break of 109 to the upside,\nalong with daily price recently engulfing its 200-day SMA (orange \u2013 109.02),\nUSD\/JPY buyers remain on strong footing. However, considering the weekly timeframe\nhas yet to conquer the 2019 yearly opening level nearing at 109.68 and a 127.2%\nFibonacci ext. point at 109.56 (taken from the low 104.44), the uptrend may yet\nface a potential ceiling. <\/p>\n\n\n\n

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

While a number of traders will have eyes\non 109 as a point of potential support today, the fact we came within 8 points\nof connecting with weekly structure is concerning. Therefore, a cautious stance\nin regards to longs is recommended today.<\/p>\n\n\n\n

In the event we continue to punch higher\nfrom current price and cross swords with H4 Quasimodo resistance at 109.74,\nselling this market countertrend is an option. Knowing the Quasimodo resistance\nboasts additional backing from weekly structure is certainly appealing. Given\nthis is a countertrend trade, though, traders may find comfort in waiting for\nadditional H4 bearish candlestick confirmation to form before pulling the\ntrigger (entry\/risk levels can then be set according to this pattern). <\/p>\n\n\n\n

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

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

USD\/CAD movement remains languishing sub\n1.32 on the H4 scale, bolstered by a 50.0% retracement ratio at 1.3194,\nAugust\u2019s opening level at 1.3187 and a trend line support-turned resistance\netched from the low 1.3134 (green). A break above here could see a run to\nOctober\u2019s opening level at 1.3239 materialise. With WTI prices gaining traction\nfollowing Wednesday’s modest retreat, the commodity-sensitive Canadian dollar remained\nresilient against the greenback Thursday.<\/p>\n\n\n\n

With respect to higher-timeframe action,\nas underlined in previous reports, weekly price exhibits a bullish presence at\nthe moment as buyers extend last week\u2019s recovery off trend line support\n(extended from the low 1.2061) in reasonably strong fashion. Additional upside\nfrom this point has tops around 1.3342 in sight, closely followed by the 2017\nyearly opening level at 1.3434 and trend line resistance taken from the peak at\n1.3661. The key observation on the daily timeframe is supply at 1.3239-1.3199. Intersecting\nwith this area is the 50-day SMA (blue \u2013 1.3208), with the 200-day SMA (orange\n\u2013 1.3274) positioned a few points above.<\/p>\n\n\n\n

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

The H4 resistance area at 1.32\/1.3187 is\nstill likely eyed by a number of traders for possible shorting opportunities,\nas its bolstered by daily supply at 1.3239-1.3199. Downside targets from this\npoint has the 1.3115 November 5 low in sight, shadowed closely by the 1.31\nhandle.<\/p>\n\n\n\n

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

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

The safe-haven Swiss franc was a clear\nunderperformer Thursday amid positive trade headlines between the US and China.\n<\/p>\n\n\n\n

USD\/CHF activity added more than 20\npoints, or 0.23%, drawing the market to highs at 0.9975. H4 structure reveals recent\nupside topped just south of an interesting area of resistance (green) between\n1.0000 (parity), a Quasimodo resistance at 0.9989 and October\u2019s opening level\nat 0.9977. What\u2019s more, the approach is close to completing an ABCD correction\n(red arrows) which terminates at 0.9982.<\/p>\n\n\n\n

The technical setting on the bigger\npicture, nevertheless, has weekly flow trading within the parapets of supply at\n1.0014-0.9892. An upside move out of the said supply may draw in Quasimodo\nresistance at 1.0124, while downside has the 2018 yearly opening level at\n0.9744 in view. According to the primary trend, price reflects a slightly\nbullish tone; however, do remain aware we have been rangebound since the later\npart of 2015 (0.9444\/1.0240). <\/p>\n\n\n\n

Daily flow, on the other hand, recently\ncrossed paths with the 200-day SMA (orange \u2013 0.9953), sited just south of a\nresistance area coming in at 1.0010\/0.9986. Note the 50-day SMA (blue \u2013 0.9918)\nremains supportive. <\/p>\n\n\n\n

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

The green area on the H4 scale between\n1.0000\/0.9977 is still likely of interest for shorts. Not only is it positioned\nwithin the walls of the current weekly supply, the H4 zone is also glued to the\nunderside of the noted daily resistance area and comes complete with an H4 ABCD\ncorrection. A sell from here has the 200-day SMA set as the initial target.  <\/p>\n\n\n\n

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

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

Wall Street\u2019s main equity indexes, the\nDow Jones industrial average and the S&P 500, closed at fresh records\nThursday, as investors digested latest headlines surrounding trade between the\nUS and China over a new agreement to cancel tariffs in stages. The Dow Jones\nindustrial average added 182.24 points, or 0.66%; the S&P 500 added 8.40\npoints, or 0.27% and the tech-heavy Nasdaq 100 advanced 23.62 points, or 0.29%.<\/p>\n\n\n\n

From\nA technical standpoint, the Dow\u2019s H4 candles trade within an ascending channel\nformation taken from a low of 25710 and a high at 26620. A retest of the\nchannel\u2019s support is certainly an option today, with a break of this barrier\nportending an approach towards weekly support coming in at 27335.<\/p>\n\n\n\n

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

Technically, the market likely has eyes\non H4 channel support highlighted above. A retest of this line \u2013 coupled with a\nH4 bullish candlestick configuration \u2013 is likely sufficient to prompt another\nrun higher. Entry and risk can be calculated according to the H4 candlestick\u2019s\nparameters, targeting the previous day\u2019s high as the initial take-profit\ntarget. <\/p>\n\n\n\n

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

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

Safe-haven markets tumbled Thursday in\nresponse to the latest headlines surrounding trade between the US and China.\nDown 1.48%, the price of gold fell from a high of 1492.1 to a low at 1460.8,\nplacing the yellow metal at a weekly loss of nearly 3.00%.<\/p>\n\n\n\n

Technically speaking, H4 price shattered\nthe lower edge of a month-long range between a support area coming in\nat 1481.1-1490.2 and a resistance zone at 1519.9-1512.1. Selling also overthrew\nnearby support in the form of October\u2019s opening level at 1472.8 and finished\nthe day mildly paring losses off Quasimodo support pencilled in at 1464.2.<\/p>\n\n\n\n

The\nstory on the higher timeframes, however, reveals daily price respected channel\nresistance (extended from the high 1557.1) yesterday and is now poised to\nchallenge a nearby support area coming in at 1448.9-1419.9 (aligns closely with\na 38.2% Fibonacci retracement ratio at 1448.5). In terms of the weekly\ntimeframe, buyers struggle to hold the support area at 1487.9-1470.2, with a decisive\npush beneath here potentially setting the long-term stage for a move towards two\nlayers of support at 1392.0 and 1417.8.<\/p>\n\n\n\n

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

Seeing\nweekly price have a hard time at its current support area and daily price\nexhibit scope to press lower, buying the reaction off the H4 Quasimodo support\nat 1464.2 is chancy and unlikely to breach October\u2019s opening level at 1472.8. A\nbearish theme, therefore, would be open should a H4 close form beneath 1464.2,\ntargeting 1448.9 (the top edge of the daily support area) as the initial\ntake-profit zone. <\/p>\n\n\n\n

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

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The European shared currency traded lower against the buck Thursday, erasing more than 0.15% and recording its fourth successive losing session. The dollar index firmed yesterday, breaching 98.00 to the upside as US Treasury yields rose sharply \u2013 10-year note trades at 1.919% \u2013 amid positive US\/China trade headlines that triggered safe-haven outflows.<\/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\/37388"}],"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=37388"}],"version-history":[{"count":2,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37388\/revisions"}],"predecessor-version":[{"id":37391,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37388\/revisions\/37391"}],"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=37388"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/categories?post=37388"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/tags?post=37388"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}