A quick look at markets 19 October 2018

  • EURUSD – After hitting support at 1.1430 we’ve seen a modest bounce but it’s looking very dead cat-ish. The main damage has been done through 1.1500. 1.1470 is the resistance level as I type (actually just being tested), and that could be protection by sellers through 80. It’ll be tough again into 1.1500 without any news or data kickers. Under 1.1430, the big fig is the next main support point.
  • GBPUSD – Similarly to EURUSD, support is found around 1.3020/10 but the bounce looks limited. EURGBP looks to be casting a spell over both pairs as it rebounds from a drop after failing to cement the move into 0.8800. 1.3060, 80/90 and 1.3100 will be the res levels above. 1.30, the main support below. Stops are lurking through 1.2990
  • USDJPY – My old mate at 112.50 is once again holding court in the price action. For those that don’t know, this is a very old level that has a habit of becoming a strong S&R level. Get and hold above, and we go up, stay below, and the downside remains possible. It’s a great level to watch when things are quiet, like right now
  • AUDUSD – Looks to be a bit of a relief rally from perhaps some overly negative expectations for last night’s Chinese data. There’s been a light improvement in risk (in FX anyway, see JPY in general). A real test will be what happens on a return to the current big resistance level around 0.7150. Below here, buyers were happy to soak it up to 0.7090 and then they stepped up to 0.7100 after
  • USDCAD – Has been heading south after hitting the secondary resistance point from 1.3050, around 1.3080. 1.3015/20 is the support close to here before more at 1.30. Potentially big CAD data coming up via CPI and retail sales with extra focus on the BOC next week. Perhaps the market is reducing some positions into the data risk, hence the drop, as it too starts to think about the BOC

There’s a distinct lack of appetite this morning. I think yesterday’s losses in US stocks might have jangled a few more nerves, especially coming in what’s been a pretty solid earnings period, and so it looks like markets are asking the question of whether yesterday is going to continue today. European stocks are negative, except for the FTSE and bond yields steady, although towards the higher end of the day’s range. US data is pretty light with only existing home sales due. We do have Fed’s Bostic and Kaplan speaking later, with BOE’s Carney sandwiched in between them.


Ryan Littlestone

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