The EURUSD pair fails to break above 1.16700. Today we have a new withdrawal from that level to the current 1.62000. Since the beginning of October, we have been in a growing canal, but we encountered an obstacle over the last week.
We need a jump above 1.167000 to try to test the next resistance at 1.17000.
Upstairs, the next resistance awaits us in the upper trend line, the MA200 and the zone 1.17200-1.17400.
EURUSD must stay within this growing channel if it wants to continue up towards 1.17500 -1.18000.
We need further negative consolidation, a drop in the price below the MA50 moving average, and testing the zone at 1.16000.
The next support is at 1.15700, then a lower low in October at 1.15220.
GBPUSD Chart Analysis
GBPUSD moves in a growing channel during October. Pair encounters see resistance in the upper trend line zone, making a pullback from that level descending to the current 1.37670. We are now testing the MA20 and MA200, and we expect a more concrete sign of the future direction of this pair.
As long as we are in the October growing channel, we can expect further growth of this pair.
We need positive consolidation above the MA20 and MA200 moving averages and support in the channel lower line.
Our first resistance is 1.38000, then 1.38500, and the smaller target nigh from September to 1.39000.
GBPUSD needs to continue this negative consolidation and put more pressure on the bottom line of the channel.
We are looking for the first support in zone 1.36500-1.370000 with an MA50 moving average.
Our next major support is the zone around 1.36000 from the beginning of October.
AUDUSD Chart Analysis
Monday is quiet for now, and the AUDUSD pair settled at 0.75000, testing 50.0% Fibonacci level and MA20 moving average. As of Aug 20, we are in a growing channel and are now consolidating below the top line.
The pair must remain above the MA20 moving average to make a break above the current resistance.
Our first resistance is at 0.75500 and the top line of the channel, then 61.8% Fibonacci level at 0.76000, zone from early July.
AUDUSD should continue to withdraw well below the MA20 moving average.
The lower support is at 38.2% Fibonacci level at 0.74000, and the middle support is at 0.74300.
A further decline brings us down to MA50 and MA200 moving averages in the 0.73500-0.73800 zone.
Forex Market Overview
German business confidence weakened for the fourth month in a row in October and reached its lowest level in six months, as supply bottlenecks greatly burdened expectations, according to the results of the Ifo Institute’s research on Monday.
The business confidence index dropped more than expected to 97.7 in October from a revised 98.9 in September. The expected level was 97.9. Supply problems are giving businesses a headache, IFO president Clemens Fuest said.
“The fourth consecutive monthly decline in the Ifo business climate index provides more evidence that the supply-side disruption is causing a sharp slowdown in the German economy and suggesting problems spread beyond production,” said Andrew Kenningham, an economist at Capital Economics.
The business climate index fell again in production, and companies were less satisfied with their current business. The business climate in the services sector deteriorated again after recovering in the previous month, and the companies were much less optimistic about the coming months.
Japan’s leading index fell more in August than originally estimated, final data from the government cabinet showed on Monday.
The leading index, which measures future economic activity, fell to 101.3 in August from 104.1 a month ago. The result is the lowest since February.
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