Daily Technical Analysis. Tuesday, October 24
The Euro fell in Asian trading for Tuesday’s Session against the US Dollar for the third session in a row as the Dollar received support from renewed expectations for Federal Tax cuts that fueled an increase in yields on US Treasuries with a two-year Bond Yield rising to a nine-year high.
Technically, the EURUSD tried to absorb recent selling pressures and with no clear signals to reverse the overall downtrend, the pair managed to break through 1.1775 resistance levels that would allow the market to correct higher and possibly test the second resistance at 1.1800 while breaking the support at 1.1750
The British Pound rose today, supported by a drop in the Dollar against the major currencies, as well as comments by the British Prime Minister, which contributed to improving the outlook for Britain in the wake of the exit from the European Union.
Technically, despite recent gains, the pair still has to break above the resistance levels at 1.3225 and 1.3240 to confirm the continuation of the uptrend. A drop below the close support at 1.3200 would affect the recent uptrend and cause the market to proceed in a sideways movement.
The US Dollar rose against the Yen during Asian trading today, after hitting a three-month high against the Yen, as Investors bet that a landslide victory for the ruling party in Japan would mean continued strong monetary policy for Prime Minister Shinzo Abe.
The Nikkei was down 0.12 percent at 2,1670 points. The broader Topix Index was down 0.07 percent at 1,743.99 points. Technically, technical reading shows that prices are trying to catch a breath after the recent strong rally. With no signs of a general bullish trend change. Only breaking support levels at 113.10 would allow prices to retreat further and perhaps test 112.85 levels.
At the same time a breach of near resistance levels at 113.55 would invite buyers to enter the market and possibly test 113.95 levels.
Technical reading shows that prices are trying to catch a breath after the recent strong rally, with no signs of a general uptrend change. Only breaking support levels at 0.9825 would allow prices to fall further and may test 0.9800 levels. At the same time, any breach of the near resistance levels at 1.022 will invite buyers to enter the market and possibly test levels.
Gold prices witnessed weak movements during the Asian Session on Tuesday after the positive shift witnessed yesterday’s trading, as it reduced its losses yesterday. Technically, prices are trying to absorb selling pressure.
The recent comments from Federal Reserve members, which indicated the Bank’s intention to continue tightening monetary policy has also contributed to the negative pressure on Gold.
Prices are moving within a general downtrend, if it continues to rise and breach resistance levels of 1282, that would allow for a higher correction and possibly test the second resistance at 1288, while breaking the support level at 1280 would encourage a bearish trend.