{"id":37423,"date":"2019-11-12T14:33:26","date_gmt":"2019-11-12T03:33:26","guid":{"rendered":"https:\/\/www.icmarkets.com\/blog\/?p=37423"},"modified":"2025-11-17T16:52:47","modified_gmt":"2025-11-17T05:52:47","slug":"tuesday-12th-november-dollar-snaps-five-day-winning-streak-a-retest-of-98-00-likely-in-store","status":"publish","type":"post","link":"https:\/\/www.icmarkets.com\/blog\/tuesday-12th-november-dollar-snaps-five-day-winning-streak-a-retest-of-98-00-likely-in-store\/","title":{"rendered":"Tuesday 12th November: Dollar snaps five-day winning streak; a retest of 98.00 likely in store."},"content":{"rendered":"\n

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

UK Average Earnings Index 3m\/y; UK\nClaimant Count Change; UK Unemployment Rate; German ZEW Economic Sentiment; FOMC\nMember Clarida Speaks.<\/p>\n\n\n\n

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

EUR\/USD movement opened the new week a\nshade higher, consequently snapping a five-day bearish phase from 1.1175. The\ndollar index, or DXY, receded from highs of 98.40, poised to revisit its 98.00\nthreshold. <\/p>\n\n\n\n

On the data front, there was not too\nmuch to shout about. As reported by the Federal Statistical Office (Destatis), the\nselling prices in wholesale trade fell by 2.3% in October 2019 from the\ncorresponding month of the preceding year. From September 2019 to October 2019\nthe index slightly fell by 0.1%. <\/em>US banks were also closed in observance of\nVeterans Day.<\/p>\n\n\n\n

Technically, the EUR\/USD concluded pretty\nmuch unchanged. <\/strong><\/p>\n\n\n\n

Weekly flow has sellers marching south from\nthe underside of a long-standing resistance area drawn from 1.1119-1.1295, recording\nits worst weekly decline since August last week. Increased selling has the\nlower boundary of a descending channel to target (extended from the low\n1.1109), set a few points north of the 2016 yearly opening level at 1.0873. Concerning\ntrend direction, the primary downtrend has been in motion since topping in\nearly 2018 at 1.2555.<\/p>\n\n\n\n

Although a mild pullback was observed\nMonday, the daily 50-day SMA (blue \u2013 1.1041) proved a tough nut to crack, in\nterms of dynamic resistance. With the said SMA in sight, as well as another\nlayer of daily resistance sited at 1.1072, traders\u2019 crosshairs likely remain\nfixed on daily demand at 1.0851-1.0950 \u2013 houses the 2016 yearly opening level\nmentioned above on the weekly timeframe at 1.0873. <\/p>\n\n\n\n

As underscored in recent technical research on the H4 timeframe<\/strong>, a distinct double-top pattern formed (peaks plotted at 1.1179\/1.1175) after breaking the 1.1073 October 24 low (the confirmation point) on November 5. Some technicians would label the peaks as an \u2018eve and eve\u2019 formation, considered to be a higher-probability pattern. The next downside target on this scale can be seen at the 1.10 handle, sited close by September\u2019s opening level at 1.0989 and a 61.8% Fibonacci retracement ratio at 1.0994. Despite yesterday\u2019s pullback, the pair is still likely to test 1.10, given the double-top\u2019s take-profit target is set beneath this value at 1.0965 (black arrows \u2013 measured by taking the value from the tallest peak and adding this to the breakout point). <\/p>\n\n\n\n

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

Traders short the H4 double top pattern\nlikely reduced risk to breakeven before the close. The initial take-profit\ntarget, as underscored above, is set around the key figure 1.10. Considering\nits local confluence (sited close by September\u2019s opening level at 1.0989 and\na 61.8% Fibonacci retracement ratio at 1.0994<\/em>), active buying is expected\nfrom here. However, with higher-timeframe structure suggesting a move to as low\nas the top edge of daily demand plotted at 1.0950 this week, which happens to\nconverge closely with the H4 double-top\u2019s take-profit target, it\u2019s unlikely the\nbuying will be anything to get excited about.<\/p>\n\n\n\n

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

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

Sterling, an outperformer against its US\ncounterpart Monday, advanced more than 80 points, or 0.63%. The main catalyst fell\non news that Brexit Party\u2019s Nigel Farage announced his party will not be\ncontesting any conservative led seats as he was worried about a hung parliament\nif he were to go ahead with his initial plan after UK Prime Minister Boris\nJohnson rejected his leave alliance deal. The move lifted GBP\/USD action to\nhighs just shy of the 1.29 handle, before mildly trimming gains into the close.\n<\/p>\n\n\n\n

In terms of macroeconomic data, UK gross\ndomestic product (GDP), released by the Office for National Statistics, came in\nlower than expected at 0.3% in Q3 2019. UK manufacturing production m\/m also disappointed.\n<\/p>\n\n\n\n

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

Following a brief period of\nconsolidation a few points north of 1.28, likely gathering buy orders, GBP\/USD\naction swung lower and shook hands with an interesting area of support marked\nin grey. Made up of weekly support at 1.2739 and daily support coming in at\n1.2769, as well as a H4 ABCD correction pattern taken from the high 1.3012\n(black arrows) and RSI confirmation (hidden bullish divergence within oversold\nterritory \u2013 blue line), this area is likely of interest for potential longs\ntoday\/early this week. What\u2019s also interesting is a number of sell stops were\ntripped on the break of 1.28, both from traders attempting to fade the figure\nand those short the breakout, thus potentially providing liquidity to buy.<\/em><\/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. A conservative entry on the close of the breakout candle is then an\noption, with protective stop-loss orders either plotted beneath 1.2739 or the\nlower shadow of the breakout candle. <\/em><\/p>\n\n\n\n

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

Traders who entered long above 1.28 on\nthe back of the H4 closing candle at 1.2803 ended Monday with a smile. With\nrisk reduced to breakeven and the majority of the position liquidated, traders\nare now likely looking for additional gains.<\/p>\n\n\n\n

An upside break of 1.29 today could draw\nin November\u2019s opening level at 1.2938, followed by a possible move to the key\nfigure 1.30. Until 1.2938 is engulfed, entering fresh longs is tricky on the H4\nscale. <\/p>\n\n\n\n

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

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

Following last week\u2019s decline of more\nthan 55 points, AUD\/USD action wrapped up Monday mostly unmoved as US banks closed\nin observance of Veterans Day. As such, we head into Tuesday employing a\nsimilar outlook aired in Monday\u2019s technical briefing. <\/strong><\/p>\n\n\n\n

Recent activity on the weekly timeframe\nwitnessed the AUD\/USD deliver a two-candle fakeout to the top edge of a 3-month\nlong consolidation zone between 0.6894\/0.6677 (light grey). Although likely to\nencourage further selling over the coming weeks, resistance outside of the said\nrange holds at the 2019 yearly opening level drawn from 0.7042, in the event we\npush higher. <\/p>\n\n\n\n

With a primary downtrend in play since\nearly 2018, breaking higher is likely to be a challenge.<\/p>\n\n\n\n

In conjunction with weekly analysis,\ndaily swing resistance seen at 0.6910 \u2013 coupled with daily trend line\nresistance taken from the high 0.7393 \u2013 held price action lower last week.\nFurther downside from this point will likely draw in daily support at 0.6808,\naligning closely with the 50-day SMA (blue \u2013 0.6816 [rising]). Note the 200-day\nSMA (orange \u2013 0.6942) remains pointing south.<\/p>\n\n\n\n

Friday kicked off defensively after the Reserve\nBank of Australia (RBA) reiterated the board is prepared to ease policy further\nif needed. This, alongside a robust US dollar and US President Trump stating he\nhas not yet agreed to roll back tariffs on China, added to the downbeat tone\nthroughout the day.  <\/p>\n\n\n\n

Traders who read Friday morning\u2019s\ntechnical briefing may recall the following piece (slightly adapted):<\/p>\n\n\n\n

With buyers and sellers squaring off\naround the 0.69 region and trend line support-turned resistance (0.6723) this\nmorning, as well as resistance observed on the higher timeframes, technical\nstudies suggest sellers have the upper hand. Should a notable H4 bearish\ncandlestick signal form from 0.69 today, this may encourage a run lower,\ntargeting yesterday\u2019s session low at 0.6861, followed by H4 support coming in\nat 0.6809\/trend line support etched from the low 0.6670. <\/em><\/p>\n\n\n\n

Denoted by a black arrow, Friday sported\nan inside candlestick formation prior to the descent and engulfed 0.6861,\npotentially clearing the path to the H4 trend line support\/H4 support\ncombination highlighted above. <\/p>\n\n\n\n

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

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

From a technical standpoint, additional\ndownside is a possibility this week at least until reaching H4 support at\n0.6809 (essentially marking the same base as daily support at 0.6808). Despite\nthis, though, a minor pullback is expected due to the completion of a H4 ABCD\ncorrection taken from the high 0.6928 (blue arrows), though is unlikely to\nbreach 0.69. <\/p>\n\n\n\n

Those short Friday\u2019s H4 inside candle\nformation likely reduced risk to breakeven before the weekly close, with eyes\non lower levels this week. Traders who missed the move may, assuming a\ncorrection based on the H4 ABCD pattern, get a second opportunity to enter\nshort, preferably around the 0.69 region. \n<\/p>\n\n\n\n

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

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

USD\/JPY traded modestly lower Monday, weighed\nby US President Trump\u2019s recent comments regarding tariffs on China, as well as geopolitical\nconcerns intensifying in Hong Kong in early trade.<\/p>\n\n\n\n

Technically, the H4 candles revisited\nthe 109 region yesterday and have so far held ground, despite a mild breach to\nlows of 108.89. South of here lies last Thursday\u2019s low 108.64, while to the\nupside tops are visible at around the 109.50ish mark, closely shadowed by a Quasimodo\nresistance at 109.74 (not visible on the screen). <\/p>\n\n\n\n

On a wider perspective, weekly movement reveals\nresistance is nearing in the form of the 2019 yearly opening level at 109.68\nand a 127.2% Fibonacci ext. point at 109.56 (taken from the low 104.44). Also\nsited close by is trend line resistance extended from the high 114.23.<\/p>\n\n\n\n

Activity on the daily timeframe holds\nnorth of the 200-day SMA (orange \u2013 109.01), which, by and of itself, is\nconsidered a bullish indicator. Having noted weekly resistance plotted nearby\nat 109.68, and a daily ascending wedge formation unfolding since early\nSeptember (104.44\/108.47 \u2013 red lines), the likelihood of a continuation north,\nlong term that is, is unlikely.<\/p>\n\n\n\n

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

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

While traders may have bought 109 as a\npoint of potential support, in hopes of joining the immediate trend, the fact\nwe came within 8 points of connecting with weekly structure is concerning.\nTherefore, a cautious stance in regards to longs is recommended.<\/p>\n\n\n\n

In the event we continue to punch higher\nfrom current price, however, and cross swords with H4 Quasimodo resistance at\n109.74, selling this market countertrend is then an option. Knowing the\nQuasimodo resistance boasts additional backing from weekly structure is\ncertainly appealing. Given this is a countertrend trade, though, traders may\nfind comfort in waiting for additional H4 bearish candlestick confirmation to\nform before pulling the trigger. A bearish candlestick signal will not\nguarantee a winning trade, but it will help identify seller intent and provide\nentry and risk levels to work with.<\/p>\n\n\n\n

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

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

Monday had the US dollar a touch higher\nvs. the Canadian dollar, though impetus was lacking due to US and Canadian\nbanks closing in observance of Veterans Day and Remembrance Day, respectively<\/strong>.\nWTI prices nudged lower, holding south of $57.50\/bbl, while the dollar index modestly\nretreated. <\/p>\n\n\n\n

USD\/CAD flow, in recent hours, gathered\nmomentum and is attempting to dethrone October\u2019s opening level at 1.3239 on the\nH4 scale. <\/p>\n\n\n\n

In similar fashion to Monday\u2019s technical\nbriefing<\/strong>, weekly price continues to exhibit a\nbullish presence as buyers extend the recovery off trend line support (taken\nfrom the low 1.2061) in reasonably strong fashion. Additional upside from this\npoint has tops around 1.3342 in sight, closely followed by the 2017 yearly\nopening level at 1.3434 and trend line resistance taken from the peak at\n1.3661. Overall, the immediate trend faces north since bottoming in September\n2017, though this move could also be considered a deep pullback in a larger\ndowntrend from the 1.4689 peak in early January 2016.<\/p>\n\n\n\n

A closer reading of price action on the\ndaily timeframe reveals the unit closed above the 50-day SMA (blue \u2013 1.3205),\nsuggesting a possible approach towards the 200-day SMA (orange \u2013 1.3275) may\ncome about this week. <\/p>\n\n\n\n

Should H4 price overthrow 1.3239,\nlimited resistance is visible until reaching 1.33. Supporting 1.33 as a\nresistance area, we have a potential ABCD correction (black arrows) terminating\nat 1.3287, a 161.8% Fibonacci ext. point at 1.3314, Quasimodo resistance at\n1.3310 and September\u2019s opening level at 1.3314 (green). In addition, the\n200-day SMA is seen lurking just south of this zone. <\/p>\n\n\n\n

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

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

1.3314\/1.3287 on the H4 timeframe is\ncertainly an area of resistance to keep an eye on for potential shorts. <\/p>\n\n\n\n

More immediate, however, we could\nwitness a retest at 1.32 form as support today should sellers defend 1.3239. A\nlong based off this level has the backing of weekly price rallying from its\ntrend line support, and daily price recently crossing above its 50-day SMA. In\norder to help avoid a whipsaw to November\u2019s opening level at 1.3168, though,\ntraders may opt to wait and see if a H4 bullish candlestick signal forms before\npulling the trigger, targeting 1.3239 as the initial upside target. <\/p>\n\n\n\n

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

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

Safe-haven demand benefitted the Swiss franc\nMonday, weighed by renewed trade uncertainty between the US and China. <\/p>\n\n\n\n

Based on Monday\u2019s technical briefing,\ntraders may recall the following:<\/p>\n\n\n\n

Broad-based USD strength Friday lifted\nthe H4 candles to October\u2019s opening level at 0.9977, where a modest reaction\nwas observed into the close. Accompanied closely by a Quasimodo resistance\nlevel at 0.9991, a H4 ABCD correction (red arrows) at 0.9982 and the 1.0000\nfigure (parity), we have ourselves a reasonably tight area of resistance to\nwork with today\/early this week. <\/em><\/p>\n\n\n\n

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

Supply at 1.0014-0.9892 remains in play,\ndespite recent buying. 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. 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 sight. <\/em><\/p>\n\n\n\n

According to the primary trend, price\nalso reflects a slightly bullish tone; however, do remain aware we have been\nrangebound since the later part of 2015 (0.9444\/1.0240).<\/em><\/p>\n\n\n\n

Technical research on the daily\ntimeframe reveals price overthrew the 200-day SMA function Friday (orange \u2013\n0.9953), though crossed back beneath the value yesterday. A few points north of\nthe said SMA sits a familiar resistance area coming in at 1.0010\/0.9986. <\/p>\n\n\n\n

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

Well done to any readers who managed to\nsell 1.0000\/0.9977. Not only is the zone positioned within the walls of the\ncurrent weekly supply, it is also glued to the underside of the noted daily\nresistance area. The 50-day SMA (blue \u2013 0.9920) appears to be the next logical\ndownside target. <\/p>\n\n\n\n

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

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

US stocks kicked off the week in\nnegative territory, falling amid uncertainty surrounding trade between the US\nand China. The\nDow Jones industrial average closed flat; the S&P 500 erased 6.07 points,\nor 0.20% and the tech-heavy Nasdaq 100 lost 13.97 points, or 0.17%.<\/p>\n\n\n\n

The Dow\u2019s technical picture, despite US\nPresident Trump sparking fresh doubts about when the world’s two largest\neconomies will end a 16-month trade war, reveals the H4 candles retested\nchannel support extended from the low of 25710. Price action traders may\nalso wish to acknowledge recent movement formed a reasonably nice-looking\nhammer candlestick pattern on the daily timeframe (considered a bullish signal).\n<\/p>\n\n\n\n

In\nterms of higher-timeframe structure, however, weekly support is a central\nfloor at 27335. <\/p>\n\n\n\n

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

The rebound off H4 channel support\nyesterday has likely caught the attention of many chartists, with some likely entering\nlong at the close of the H4 rejection candle (27653), with protective stop-loss\norders plotted around 27464. For some traders, though, this may represent too\nmuch risk. Therefore, waiting and seeing if an additional retest occurs might\nbe an option. <\/p>\n\n\n\n

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

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

In recent trade, the yellow metal opened\nthe new week lower, trading as far south as 1448.4 against the greenback. <\/p>\n\n\n\n

From the H4 timeframe, we can see price\naction retested Quasimodo support-turned resistance at 1464.2 and H4 trend\nline support-turned resistance extended from the low 1381.9, and traded lower. For\ntraders who read Monday\u2019s technical briefing you may recall the following\npiece:<\/p>\n\n\n\n

Having\nwatched weekly price dethrone a significant support area at 1487.9-1470.2 and\ndaily price exhibit space to press lower to a daily support area at 1448.9-1419.9,\nselling the H4 rejection candle off the underside of the H4 Quasimodo\nsupport-turned resistance at 1464.2 and H4 trend line support-turned resistance\ncould be an option. <\/em><\/p>\n\n\n\n

With\na protective stop-loss order plotted above 1468.2 and an entry at current\nprice, there\u2019s ample room to reduce risk to breakeven before connecting with\nthe first downside target: the top edge of the daily support area at 1448.9.<\/em><\/p>\n\n\n\n

As\nevident from the chart, those who entered short Monday ended the session in\nprofit as daily price shook hands with the top edge of its support area mentioned\nabove at 1448.9-1419.9 (aligns closely with a 38.2% Fibonacci retracement ratio\nat 1448.5). What\u2019s also interesting here is the completion of a potential\nthree-drive pattern around the top edge of the said support zone (black\narrows).  <\/p>\n\n\n\n

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

On\nthe one hand, we now have daily buyers likely attempting to make an appearance,\nthough on the other hand weekly sellers likely target support coming in at\n1392.0 and 1417.8. As you can see, irrespective of the direction selected,\nopposition is clear on both sides of the market. <\/p>\n\n\n\n

For\nsellers short, reducing risk to breakeven and liquidating a portion of the\nposition is certainly something to consider. However, keeping a portion of the\nposition running in case weekly price (tends to override daily structure) kicks\nin and pushes lower is also worthy of consideration.<\/p>\n\n\n\n

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

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Key risk events today: UK Average Earnings Index 3m\/y; UK Claimant […]<\/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\/37423"}],"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=37423"}],"version-history":[{"count":2,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37423\/revisions"}],"predecessor-version":[{"id":81337,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/37423\/revisions\/81337"}],"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=37423"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/categories?post=37423"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/tags?post=37423"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}