Euro resumes gains ahead of US inflation data

Euro rose in European trade against dollar on track for two-month highs amid prospects of further policy tightening by the ECB. The greenback lost additional ground ahead of US inflation data in October, which will provide additional clues on the Fed's next rate hike in December. 

EURUSD rose 0.35% to 1.0043, with a session-low at 1.0006, after falling 0.6% yesterday, the first loss in four days on profit-taking away from two-month highs at 1.0096.

The ECB

German two-year treasury yields are hovering near late 2008 highs at 2.252% recently. Such a spike to 14-year highs are based on expected policy tightening by the ECB soon to close the policy gap with the US.

The Dollar

The dollar index fell 0.3% on Thursday on track for two-month lows at 109.36 against a basket of major rivals. Such a decline comes ahead of major US inflation data in October, which will provide crucial clues to the Fed's December policy decisions. Currently, traders estimates a 67% chance of a 0.5% rate hike by the Fed in December, and a 33% chance of a 0.75% rate hike.

S&P 500 - Local corrective trend continues

The American market significantly slowed down the dynamics in anticipation of the results of the Midterm elections to the US Congress, as well as data on inflation. The S&P 500 is currently correcting, trading at 3759.

Based on the interim results of the voting, it is quite likely that different parties will control the Senate and the House of Representatives, which will create a so-called "political impasse". This may mean that the adoption of new legislative initiatives will be difficult, and, therefore, the likelihood of the final adoption of a bill to raise corporate taxes may be reduced, which is a positive signal for the stock market.

The index quotes continued the local corrective trend, more and more clearly forming the Flag pattern on the daily chart.

Support levels: 3700, 3570 | Resistance levels: 3830, 4000

EURUSD Hits the Target

The EURUSD pair succeeded to achieve our waited target at 1.0185 and attempts to breach it, to pave the way to continue the rise and head to visit 1.0285 as a next positive target. The EMA50 continues to support the price from below, to support the continuation of the bullish trend in the upcoming sessions, taking into consideration that failing to surpass 1.0185 will press on the price to rebound bearishly and head to test 1.0 areas before any new attempt to rise.

The expected trading range for today is between 1.0100 support and 1.0285 resistance.

EURUSD - Growth is possible.

On the daily chart, the downward wave of the higher level А ended, within which the fifth wave (5) of А formed, and the development of the upward wave B started. Now, the first entry wave 1 of (1) of B i developing, and the third wave of the lower level iii of 1 is forming.

If the assumption is correct, the EURUSD pair will grow to the area of 1.0790–1.1196. In this scenario, critical stop loss level is 0.9932.

EURUSD Technical Analysis

The EURUSD pair resumes its positive trading after testing 1.0300 barrier this morning, to keep the bullish trend scenario active for today, waiting to get positive motive that assists to push the price to achieve our next main target that reaches 1.0515, reminding you that the continuation of the bullish wave requires holding above 1.0285.

The expected trading range for today is between 1.0260 support and 1.0430 resistance.

AUDCAD Settles Above the Moving Average

The AUDCAD pair resumed its correctional bullish attack by breaching 0.8840 barrier recently, to settle above the moving average 55 and notice recording additional gains by reaching 0.8935, while stochastic additional positive momentum allows us to expect providing new bullish trades, to attempt to achieve new gains that might start at 0.9 and 0.9055.

The expected trading range for today is between 0.8880 and 0.9, and the expected trend for today is Bullish.

AUDUSD - Growth is possible.

On the daily chart, the first wave of the higher level (1) formed, and a downward correction ended as the second wave (2), within which the wave C of (2) formed. Now, the development of the third wave (3) has started, and the first entry wave of the lower level i of 1 of (3) is forming.

If the assumption is correct, the AUDUSD pair will grow to the area of 0.6916 – 0.7142. In this scenario, critical stop loss level is 0.6393.

EURUSD Tests the Support Base

The EURUSD pair bounced downwards strongly after approaching our waited target at 1.0515, to test the key support base 1.0285 and keeps its stability above it, as it resumed its positive trading from there to settle around 1.0360 now. Therefore, the bullish trend scenario will remain valid and active for the upcoming period, supported by the EMA50 that carries the price from below, waiting to test 1.0515 mainly, noting that breaking 1.0285 will stop the expected rise and press on the price to turn to decline.

The expected trading range for today is between 1.0285 support and 1.0465 resistance, and the expected trend for today is Bullish.

USDCHF - Switzerland may return to neutral status soon

Also to the correction of the US dollar, the main driver of the downward dynamics of the trading instrument, experts call the readiness of the country's authorities to return to a full-fledged "neutral status." The Swiss economy is actively declining after the outbreak of a military conflict in Ukraine and joining the anti-Russian sanctions, which violated more than 200 years of neutrality of the country. Six months later, the energy crisis and rising inflation helped Swiss National Bank officials withdraw from the policy of negative rates, a serious blow to the reputation of the world's main financial haven. Yesterday, former People's Party (SVP) chairman Christopher Blocher announced the registration of the Pro Suisse Association initiative, which involves amending the Constitution to consolidate neutrality and prohibit political bodies from making decisions that contradict this principle as joining military or defense alliances. To submit the initiative to a national referendum, it is necessary to enlist the support of at least 100K citizens of the country by the spring of next year.

On the daily chart of the asset, the price has slowed down its active decline and is being corrected near the low at the end of summer.

Resistance levels: 0.9484, 0.96 | Support levels: 0.941, 0.93

USDCHF - The price is in a correction and may grow.

On the daily chart, the first upward wave of the higher level (1) of 3 forms, within which the wave 3 of (1) developed. Now, a local correction has ended as the fourth wave 4 of (1), within which the wave c of 4 has formed.

The upward dynamics of the USDCHF pair to the area of 1.02 – 1.03 are expected. In this scenario, critical stop loss level is 0.9350.

EURUSD Technical Analysis

The EURUSD pair didn’t show any strong move since morning, thus, no change to the expected bullish trend scenario for today, supported by stochastic gain to the positive momentum gradually, besides the EMA50 that carries the price from below, reminding you that our main waited target is located at 1.0515, while holding above 1.0285 represents key condition to continue the expected rise.

The expected trading range for today is between 1.0285 support and 1.0465 resistance, and the expected trend for today is Bullish.

Crude Oil - A fall is possible.

On the daily chart, a downward correction forms as the second wave of the higher level 2, within which the wave c of 2 develops. Now, the third wave of the lower level (iii) of c has formed, a local correction has ended as the fourth wave (iv) c and the development of the fifth wave (v) of c has started.

If the assumption is correct, the price of the asset will fall to the area of 77.50 – 62.55. In this scenario, critical stop loss level is 100.87.