Daily FX Brief, October 17 – Major Trade Setups – Philly Fed Index In Focus!

The I.C.E. U.S. Dollar Index slipped 0.1% on the day to 98.31. Later today, the Federal Reserve will release its latest economic report, the Beige Book.

The British Pound resumed its rally amid growing Brexit deal optimism, surging 1.2% to $1.2760, the highest level since May 16. It was reported that the U.K. and European Union negotiators would present a draft Brexit deal to national delegations later today. On the other hand, official data showed that U.K.’s jobless rate rose to 3.9% in the three months to August (3.8% expected). September C.P.I. will be reported later today (+1.8% on-year expected).

The Euro edged up 0.1% to $1.1034. The Z.E.W. German Current Situation Index dropped to -25.3 in October (-23.6 expected, -19.9 in September), the lowest level since April 2010. USD/JPY climbed 0.4% to 108.81.

Economic Events to Watch Today

Let’s took at these fundamentals.

 

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XAU/USD– Daily Analysis

the safe-haven metal prices dropped despite the U.S.S. weak retail sales data and hinted the higher possibility of a rate cut from the Federal Reserve.

Data showed retail sales in the United States dropped by 0.3% during September, their highest decline since last November.

According to forecasting, investors are now expecting an 88.7% probability of a 25 basis-points rate cut at the Federal Reserve policy meeting at the end of the month.

Brexit progress still under the eyes. The report came from B.B.C. official that the United Kingdom and the European Union will not declare the deal on Brexit today. News from other sources said that the deal could still be announced at the end of this week.

Fresh U.S.-China tensions due to Hong Kong received some attention this week but failed to boost gold prices today.

Daily Support and Resistance    

S3 1457.17

S2 1471.83

S1 1481.27

Pivot Point 1486.49

R1 1495.93

R2 1501.15

R3 1515.81

XAU/USD– Trading Tips

The precious metal gold hasn’t improved much in the past several days since it succeeded in holding under 1,497 handle. Neutral sentiment appears sturdy enough to hold gold within 1,492 – 1,477 range. 

Traders may retain selling trades under 1,494 area today. In the case of a bullish violation of 1,492, the market may witness gold flying towards 1,497 area.

 

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EUR/USD – Daily Analysis

The EUR/USD currency pair failed to cross the critical resistance level and still hold below the 1.1085/90 level, despite benefiting from the sluggish U.S. data and change in European Central Bank policy maker’s bias. As of writing, the currency pair is currently trading at 1.1077.

Meanwhile, the U.S. Dollar Index took further disappointment, in terms of September month Retail sales, that sent the pair down to fresh 7-week low on Wednesday.

On the other hand, the policymakers of the European Union continue to struggling to declare a final Brexit deal with the United Kingdom and extended the discussions to Thursday before holding the 2-day European Union summit. The British policymakers didn’t get the support of the Democratic Unionist Party (D.U.P.) so far in the wake of the deal that could be agreed with the European Union.

Risk sentiment in the market is downbeat due to the difficulties between the United States and China trade deal and Brexit uncertainty with the stocks and bonds in Asia.

Whereas the Brexit is the leading cause for the pair movement and the market right now, moreover, the 2nd data from the United States and Federal reserve coming talks will likely entertaining traders.

    


Daily Support and Resistance

S3 1.0934

S2 1.0998

S1 1.1036

Pivot Point 1.1061

R1 1.11

R2 1.1124

R3 1.1188

EUR/USD – Trading Tips

The EUR/USD continues trading in the sideways range of 1.1020 – 1.1070. Lately, the pair violated the horizontal resistance level of 1.1050, which is likely to push the EUR/USD pair towards 1.1100 today. 

Taking a look at the 4-hour chart, the EUR/USD is rising in an upward channel. The bullish channel is extending support at 1.100, but before this, the previously violated figure of 1.1050 can extend bullish rally until 1.1100. Consider staying bullish above 1.1061 today.

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GBP/USD – Daily Analysis

The cable pair consolidating in the narrow range below five-months highs The GBP/USD currency pair hit the highest level of 1.2800 since May from the intraday declines of the 1.2655 area on Wednesday, mainly due to positive Brexit headlines. 

The British Pound was additionally depressed by the report in which said that the technical Brexit discussions have stuck in the obstacle, and the Brexit deal seems impossible until the United Kingdom moves. Meanwhile, the Wednesday disappointment from the new consumer numbers left a little impact on the pair intraday two-way price swings.

On the final notes, the statement came from the French President Macron, that Brexit deal was on the last track, provided substantial relief to the GBP buyers. Moreover, the German Chancellor Angela Market also said that the Brexit discussions are now at the end of the story and gave further support to the GBP.


Daily Support and Resistance

 S3 1.2341

S2 1.2563

S1 1.2691

Pivot Point 1.2785

R1 1.2913

R2 1.3006

R3 1.3228

GBP/USD – Trading Tips

The GBP/USD currency pair raised a little from the daily highs and now looks like that the pair entered in the phase of consolidation. That is seemingly caused by the investors avoiding from putting any further bullish bets due to the crucial European Council Summit, starting from today, which will finally decide the United Kingdom will leave the European Union with a deal or not on October 31.

The GBP/USD is testing the firm resistance market of 1.285 and also have formed bearish candles followed by a strong bullish trend. This can drive bearish movement in the market. Therefore, consider the trend bearish below1.2860 mark, and the GBP/USD can stay bearish until 1.2754 and 1.2736 areas.

All the best!