Below you will find technical analysis of the top forex pairs, commodities, stocks and indices to watch in today’s trading.
EUR/USD
The EUR/USD climbed to its resistance at 1.3350 as the U.S. Senate and Congress failed to reach an agreement increasing the federal budget and therefore led the U.S. government to a partial shutdown. Major departments will still be open, but the shutdown will affect about 700 thousand government employees, who will be forced to go on unpaid leave. On the other side, in Europe the situation concerning the Italian political crisis has already slightly calmed down, as the Italian Prime Minister announced he will seek a vote of confidence on Wednesday. Today except of the political issues on both the American and Europeans markets, traders should watch the EU Unemployment rate which will be released at 9.00AM (GMT). The Unemployment rate is predicted to be 12.1% and usually the prediction meets the data announced, so we do not expect any surprising results. At 2.00PM (GMT) the ISM Manufacturing PMI will be announced. It is the first key number before Friday’s Non-farm payrolls and usually it is connected with higher volatility. The pair is now running up as the European session started with support at 1.3470 and resistance at 1.3580.
Trend: Slightly Up
GBP/USD
The GBP/USD touched the 1.6200 level yesterday, but ended up staying below. As the U.S. Dollar weakened on the disappointing news from the U.S. government shutdown, the pair climbed above 1.6240. If the price runs above 1.6345 it will have reached its highest value for the past 2 years. The upper-movement can be supported by the data of the U.K. Manufacturing PMI, which will be posted at 8.30AM (GMT). For the past 5 months we have seen very strong data and an improving situation in the U.K. labour market. We are expecting the same today. The trend remains slightly bullish with support at 1.6105 and resistance at 1.6270.
Trend: Slightly Up
USD/JPY
The USD/JPY increased yesterday after the announcement of the U.S. Chicago PMI, which showed better-than-expected results. The pair increased above the 98.00 level and stayed there as the Japanese market shows mixed data (Household Spending decreased by -1.6% instead of the predicted 0.2% increase, higher Unemployment rate 4.1% but better Tankan Manufacturing Index). The pair afterwards dropped on the news of the U.S. shutdown and within the past 4 hours has lost 50 pips. The pair is now traded around the 97.90 area, with remaining bearish sentiment. The support is lying at 97.40 and resistance is lying at 98.55.
Trend: Slightly Down
GOLD
Despite the situation cocnerning the failure to pass the U.S. government budget, the price of gold decreased from $1,340/ounce to $1,325/ounce. The last time the U.S. government shut down the price of gold gained about 3 percent. The explanation why a safe-haven asset did not profit from a situation like this is most likely because of worries about the future price of gold. Gold seems to have lost the hedging stamp as the price drastically decreased since April from $1,600/ounce to $1,200/ounce. There are still predictions that the price should drop back to the $1,200/ounce area and investors do not want to take such a risk. From today till the end of this week the China market is staying closed due to public holidays. This means that the physical demand will stay weak. The trend is still expected to be bullish with support at 1,320 and resistance 1,359.
Trend: Slightly Up
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