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Daily Forex Technical Strategy

EUR/USD – Mix elements

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  • The pair has rallied as expected and met the short-term target/resistance of 1.1160 as per highlighted in our previous report (click here for a recap). It printed a high of 1.1183 on last Fri, 18 Oct U.S. session.
  • Mix elements now as it has ended yesterday, 21 Oct U.S. session with a daily “Bearish Harami” candlestick pattern that indicates a potential pull-back in price action after 5-days of consecutive bullish up moves since 15 Oct 2019. On the other hand, shorter-term elements are still positive where the hourly RSI oscillator has stated a bounce right above a significant corresponding ascending support that is closed to its oversold region.
  • Thus, prefer to turn neutral now between 1.1180 and 1.1114. An hourly close above 1.1180 sees the continuation of the rally towards 1.1245 and even 1.2900 next (1.618 Fibonacci expansion of the on-going up move from 01 Oct 2019 low & 06 Aug 2019 swing high). On the other hand, a break with an hourly close below 1.1115 opens up scope for a pull-back towards 1.1050 near-term support in the first step.

GBP/USD – No signs of bullish exhaustion yet

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  • The pair has continued to push higher within a minor steeper ascending channel in place since 14 Oct 2019 low after price action broke above the upper boundary of previous minor ascending channel from 03 Sep 2019 low on 16 Oct 2019. Bullish bias above 1.2860 key short-term pivotal support for a further potential push up to target the next intermediate resistance at 1.3210/3240 (Fibonacci expansion cluster & 03 Apr/03 May 2019 swing high area).
  • On the other hand, a break below 1.2860 negates the bullish tone a for a deeper pull-back towards 1.2685 (former minor swing high area of 11 Oct 2019 & pull-back support of the former ascending channel resistance from 03 Sep 2019).

USD/JPY – Short-term uptrend remains intact

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  • The pair has continued to evolve within a minor ascending channel in place since 03 Oct 2019 low, maintain bullish bias with an adjusted key short-term pivotal support at 108.10 for a potential push up to retest 108.90 before target the major resistance zone of 109.50/70 (minor ascending channel resistance, former major ascending support from Jun 2016 low & Fibonacci expansion cluster).
  • On the other hand, a break with an hourly close below 108.10 negates the bullish tone for a deeper pull-back towards the next support at 107.40 (lower boundary of a medium-term ascending channel from 26 Aug 2019 low & 03/07 Oct 2019 minor swing low area).

AUD/USD – At risk of a minor pull-back

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  • The pair has staged a bullish breakout above the upper limit of short-term neutrality range at 0.6810 and almost reached the upside target/resistance of 0.6890 as per highlighted in our previous report.
  • It printed a high of 0.6875 yesterday, 21 Oct and ended the U.S. session with a daily “Spinning Top” candlestick pattern which indicates “hesitation” by the bulls. Interestingly, such price action is being formed right below a medium-term resistance of 0.6890 (12 Sep 2019 swing high & the former swing low areas of 16 May/17 Jun 2019),
  • In addition, the hourly RSI oscillator has staged a bearish breakdown from its corresponding ascending support. Flip to a bearish bias below 0.6890 key short-term pivotal resistance for a potential pull-back to retest 0.6810 and a break below it exposes the next support at 0.6755 (also the minor ascending trendline from 02 Oct 2019 low).
  • On the other hand, a clearance with an hourly close above 0.6890 invalidates the bearish tone for a continuation of the corrective rebound to target 0.6950 next (the upper boundary of the major descending channel from 03 Dec 2018 high).

Charts are from eSignal

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