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 pair first tested the 1.3800 level, responding to the disappointing U.S. CB Consumer Confidence results, coupled with the statements by ECB member Ewald Novotny, who said that there is no reason for the European Central Bank to intervene and weaken the euro’s exchange rate.Nevertheless, the momentum changed leading the pair to fall all the way and reach its support at 1.3740. This downward movement was probably caused by speculation and concern over the Fed meeting, since the Fed statement and its federal fund rate will be the main event for today. The report will be posted at 6.00PM (GMT) and traders will wait for any clues as to when the Fed is likely to start its much talked about tapering of monetary stimulus. The EUR/USD already appears to be much overvalued even in light of expectations that the Fed is going to start the scaling back in March 2014. Besides this event we should also watch out for the German Unemployment Change figures at 8.55AM (GMT), ADP Non-Farm Employment Change at 12.15PM (GMT) and U.S. CPI at 12.30PM (GMT). If the ADP Non-Farm Employment change comes worse-than-expected (less than 135K) the pair might test the 1.3830 level again. The trend is now slightly bullish with support 1.3730 and resistance at 1.3830.
Trend: Slightly Up
GBP/USD
The GBP/USD pair decreased for a second day in a row and broke its support at 1.6060. The movement was first supported by disappointing U.K. Net Lending to Individuals data, which revealed a 1.4B monthly change instead of the expected 2.5B. Then the decrease continued and the pair almost touched the 1.6020 level as the U.S. Dollar got some profits due to speculation in view of the Fed statement. Today, since there are no scheduled events in the U.K. market, it will be developments in the U.S. market solely, which will drive the pair. Traders should, therefore, wait for the U.S. ADP Non-Farm Employment Change figures at 12.15PM (GMT), which is apiece of data usually connected with high market volatility and good trading opportunities. The trend is slightly bullish with support at 1.6020 and resistance at 1.6260.
Trend: Slightly Up
USD/JPY
The USD/JPY pair increased during yesterday’s trading hours and consequently broke its resistance at 97.80. The pair then started to range between 98.10 and 98.25. The Japanese Industrial Production data came out marginally below expectation (1.5% instead of 1.8%), but this was still much better than September’s results of -0.7%. Today the BoJ will post its updated prediction on the Japanese economic growth and inflation figures. It is widely expected that the BoJ statement will leave the country’s monetary policy unchanged. The trend is currently not formed yet, so traders will need to wait for the impulse and once the pair breaks the support or resistance levels, then place their trades accordingly. The support is lying at 97.40 and resistance at 98.50.
Trend: Up - Down
GOLD
The price of gold fell as the U.S Dollar experienced some profits ahead of the Fed statement, which will be released today at 6.00PM (GMT). Investor sentiment and predictions is that the Fed will not start the tapering any time soon, with the expectation being that this will only happen in March 2014. This might pull the price higher but we should not forget that the price is now already high and includes those expectations. Physical demand is weak so Gold might range below the resistance level of $1,361/ounce. The trend is slightly bullish with support at 1,340 and resistance at 1,361.
Trend: Slightly Up
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