Talking Points

  • Key levels ahead of Non-Farm Payrolls
  • Opening ranges in GBPUSD, Gold question validity of near-term rally
  • AUDUSD rally encounters near-term resistance heading into NFPs, CPI
  • Dow Jones FXCM Dollar Index (USDOLLAR) at key support

USDOLLAR Daily Chart

Forex_USD_at_Support_Ahead_of_NFPs-_GBP_AUD_Gold_Scalp_Biases_in_Focus_body_USDOLLAR_NFP.png, USD at Support Ahead of NFPs- GBP, AUD & Gold Scalp Biases in Focus

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • October opening range break puts index at key support 10,365- 10,386 / channel support
  • Break below targets objectives at 10,323 ( June high) and Fibonacci support at 10,292
  • Resistance 10,455 with breach above 10,471 targeting Oct high (10,535)
  • Note daily RSI has found support at the 30-threshold / Divergence in price action
  • Key Events Ahead: September Non-Farm Payrolls report tomorrow

Notes: It’s ALL about NFPs tomorrow with the index sitting on a cluster of near-term support targets including operative channel support, the 1.618% Fibonacci extension off the yearly high and the 38.2% retracement from the 2011 low. Although the preliminary opening range has kept the near-term bias on the short-side, we will respect this key support heading into tomorrow’s data print with the risk of a downside break rising on a weak employment report. Only a breach back above 10,470 alleviates further downside pressure with such a scenario eyeing resistance targets at 10,535, 10,581 and channel resistance.

AUDUSD Daily Chart

Forex_USD_at_Support_Ahead_of_NFPs-_GBP_AUD_Gold_Scalp_Biases_in_Focus_body_AUDUSD_NFP.png, USD at Support Ahead of NFPs- GBP, AUD & Gold Scalp Biases in Focus

Technical Outlook

  • Key Resistance: 9673- 9714
  • Breach targets objectives at 9755 (200DMA), 9811 & 9900/30
  • Daily RSI in overbought territory- Multiple support triggers pending
  • Interim support 9575 -constructive above 9510/16 support confluence
  • Key Events: US Employment Report and Australian 3Q CPI Tomorrow

Notes: We noted on October 8th that, “The October opening range hasn’t been all that helpful (may still be in the process) as we continue to press higher in aussie. Initial topside objectives are eyed at 9510/16 and 9575 with a breach here offering further conviction on longs into subsequent resistance targets. Overall the advance off the August lows remains constructive.” There have been no major shifts to the bias and indeed the pair has continued to charge through each resistance target before completing a 61.8% extension off the late August advance.

Note the pair has now also completed what seems to be a 5-wave advance and although it is in overbought territory, the oscillator can reflect this for an indefinite time period with more evidence needed before we can attempt to ‘call the turn.’ Initial momentum short triggers will be initiated with the break back below 70, with multiple trendline support triggers also pending. As we head into NFPs we will stray away from USD crosses with an opportunity to trade the Aussie still in play against the Loonie as noted in last week’s AUDCAD report. The short-side bias is in play only below 9920-40 threshold

GBPUSD Daily Chart

Forex_USD_at_Support_Ahead_of_NFPs-_GBP_AUD_Gold_Scalp_Biases_in_Focus_body_GBPUSD_Daily_NFP.png, USD at Support Ahead of NFPs- GBP, AUD & Gold Scalp Biases in Focus

Technical Outlook

  • Key support 1.5918 holds but rebound halts below October opening range high 1.6253
  • Breach eyes topside targets stacked at 09’ TL resistance, 1.6340 & 1.6380
  • Note divergence with EURUSD which already cleared monthly high
  • Daily RSI holding resistance- Topside trigger pending
  • Key Events Ahead: US Employment Report tomorrow, BoE Minutes on Wednesday and 3Q GDP on Thursday

Notes: The reversal off key support last week invalidated the short scalp-bias noted at the start of the month. However, it’s important to note that the pair has continued to respect the October highs and as such, we cannot maintain a bullish scalp-bias at these levels. With RSI heading into resistance, NFPs on tap and key UK economic data later this week, we will remain neutral-to-bearish on the pound below the opening rang high, with a breach opening up objectives at subsequent resistance targets.

Gold Daily Chart

Forex_USD_at_Support_Ahead_of_NFPs-_GBP_AUD_Gold_Scalp_Biases_in_Focus_body_GOLD.png, USD at Support Ahead of NFPs- GBP, AUD & Gold Scalp Biases in Focus

Technical Outlook

  • Gold breaks channel resistance but holds October opening-range high
  • High breach targets $1364, $1378- Key resistance now $1408-$1415
  • Interim Support at former channel resistance, $1276, $1268
  • Break of the Oct lows puts larger trend back in play- objectives at $1233, $1209
  • Daily RSI divergence and trigger break suggests may see near-term correction continue
  • Bearish invalidation now brought down to $1343
  • Key Events: US employment report

Notes: We noted earlier in the month that a, “Few things are concerning me in the near-term on gold that could interrupt our bearish outlook. 1- Daily RSI has been unable to hold below the 40-threshold (which often suggests that the near-term pullback remains corrective within a larger up- trend) 2- The sharp rebound seen early this month came off significant technical barriers and completes key Fibonacci ratios off the August highs.” While the rally off key support here again looks convincing, as in the pound, we will wait for a breach of the October highs to validate the channel break seen last Thursday.

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---Written by Michael Boutros, Currency Strategist with DailyFX

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