GBPUSD W1 12 03 2020 1734

 

In relative confluence, although due to time this isn’t so much the case anymore, lies the trend-line from the 2007 high. Regardless of whether it is in exact confluence or not, it is an important threshold that on a intra-week basis has been crossed. The key will be whether it can close above it to count as a break.

That will be one positive, but to really get cable trading higher we need to see a closing weekly candle above 13514. A close above major horizontal resistance and the long-term trend-line could clear a path for much higher prices.

The next significant area to worry about in that case might not arrive until the 2018 highs in the vicinity of 142/4400. However, resistance is resistance until it’s not, and that means we could still see another turn lower. An outcome towards lower levels appears likely to be less decisive than a breakout would be.

The bottom line is that GBP/USD is trading near a big level that could have a significant hand in how we shape our trading bias for the foreseeable future. Brexit talks appear to be nearing their end so we may have that resolution very soon.

 

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The FTSE 100 struggles to overcome a key Fibonacci level as vaccine optimism, which helped consolidate a significant recovery from the Octiber 30th lows, continues to fade. The UK stock index reached a five-month high on Monday but found increased resistance at 6465, where the 61.8% Fibonacci retracement from 7549 to 4776 is found. This level was significant back in the summer highs seen in June, as buyers were unable to consolidate above this level despite market optimism at the time. A break above this significant resistance would put focus on the 76.4% retracement, where an attempt to recover from the first coronavirus falls were halted. Moving averages seem to show that further upside is possible, but momentum is stalling, causing lower highs for 4 consecutive days.

 UK100 D1 11 20 2020 1427

 

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USDJPY D1 10 28 2020 1954

A three week decline takes price back into this critical support barrier for the third time in as many months and we’re looking for inflection off this threshold. A break / weekly close below would be needed to mark resumption of the broader downtrend towards the 78.6% Fibonacci retracement of the March rally at 109.60. Weekly resistance now stands at the March channel line / October high-week close at 105.59- a close above this threshold would be needed to shift the medium-term focus back to the topside in USD/JPY with subsequent resistance objectives eyed at 106.00 and 107.02.

A downside break of the October opening-range in USD/JPY takes price into a critical support pivot ahead of the monthly close. From a trading standpoint, a good zone to reduce short exposure / lower protective stops – be on the lookout for topside exhaustion ahead of 106.00 IF price is indeed heading lower with a close below 104.12 still needed to keep the immediate short-bias viable. Lots of event risk on tap heading into the US Presidential Elections next week - stay nimble here and look for inflection off this zone. 

 

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Spot Silver 20201118 08.54

Silver prices continue to struggle so far this week despite a lackluster US Dollar. Since the monthly high on November 9, XAG/USD is down nearly 5%. Meanwhile, the US Dollar (DXY) gained only 0.25%. Generally precious metals, like gold and silver, tend to perform well during periods of USD weakness.
A quick look at technicals on XAG/USD’s daily time frame sees silver near trendline support from its 2020 low. The 100-day Simple Moving Average is also looking to keep the focus towards the upside. A break under these would likely send a bearish signal on the precious metal, perhaps opening the door to reversing much of this year’s earlier bullish action.

 

 

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GBPUSD D1 10 26 2020 1210

This weekend’s talks between the EU and UK in London have been extended Wednesday as both sides push to get a deal signed off before the end of the transition period. Talks will then move to Brussels on Thursday. The two sides are still seemingly apart on fisheries and state aid issues, despite positive sounds last week. France, according to the Daily Telegraph, is still refusing to compromise on access to the UK’s fishing grounds, and while this remains the case then progress is expected to be slow.

There is very little on the economic calendar this week to guide Sterling, while the latest coronavirus numbers show new infections around 20,000 while there have been another 151 fatalities. Patients admitted to hospital and patients in ventilator beds numbers are also rising sharply.

After touching 1.3180 last week, GBPUSD has faded back to just above 1.3000 this morning and now approaches not just big figure support but also a 20- and 50- day simple moving average crossover which needs to hold if cable is to push higher. A conclusive break lower could open the way to the recent double low around 1.2860.

 

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