Week Ahead: Sharp Sell-off in US Fixed Income Market


Chair Powell lifted US bond yields again to the highest level since 2011. Italian turmoil has hit European risk appetite this week. Turkish inflation surged to 24.5% in September, the highest level since 2003. US economy added just 134K jobs, which was below what was expected, but unemployment rate declined to 3.7%.



Week Ahead

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Technical Analysis:
 
EURUSD

The pair has broken a major level on the Ddily chart (1.1520). The price is trading under high selling pressure and this confirms that the trend is skewed to the downside. Having said this, the price is firmly trading above the 50 and 200-day moving averages which shows that there are higher chances that the price may continue falling. The Balance of Power shows that the bears are still controlling the momentum.

The resistance is shown by the green horizontal line, which is the highest point the price made on 24t September. The support is shown by the red line, which is the lowest point formed on 15th August.

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GBPUSD
 
GBPUSD has broken its rising channel on the daily chart. The price is firmly trading below the 200-day moving averages which shows that there are higher chances the price may resume the major down trend. Currently, there is a battle between the price and the 50-day moving average and if the price breaks below it, the odds will be even stronger that the downtrend will continue from there. The Balance of Power shows that the bears are still controlling the momentum. We need to see this continue in order to support the above argument.
 
The resistance is shown by the green horizontal line which is the highest point the price made on 21st September. The support is shown by the red line, which is the lowest point formed on 15th of August.

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USDJPY
 
USDJPY is trading at a major resistance level (114.20/114.50) on the daily time frame. The price is trading in upward channel and this confirms that the trend is skewed to the upside. Having said this, the price is firmly trading above the 50 and 200-day moving averages which shows that there are higher chances that the price may break out of this upward channel. Currently, there is a battle between the price and the resistance at 114.50. If the price breaks towards the upside, the odds will be even stronger that the uptrend will shape up from there. The Balance of Power shows that the bears are still controlling the momentum. We need to see this fading and in order to support the above argument.
 
The resistance is shown by the green horizontal line which is the highest point that the price made on 1st of August 2017. The support is shown by the red line, which is the lowest point formed on 25th of September.

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XAUUSD
 
The gold price has broken a symmetrical triangle on the daily time frame. However, the price is trading in a range. Having said this, the price is firmly trading below the major level at 1215 and 200-day moving averages which shows that there are higher chances that the price may continue its down bearish move.

The Balance of Power shows that the bulls are still controlling the momentum. We need to see this fading in order to support the above argument.

The resistance is shown by the green horizontal line which is the highest point which the price made on the 27th of July. The support is show by the green line which is the lowest point formed on the 16th of August.
 
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WTI

Oil is trading above a major level of 72.50 on the daily time frame. The price is ins an uptrend and this confirms that the trend is skewed to the upside. Having said this, the price is firmly trading above the 50 and 200-day moving averages which shows that there are higher chances that the support level at 72.50 to hold. The Balance of Power shows that the bears are still controlling the momentum as traders are taking profit. We need to see this fading in order to support the above argument.
 
The resistance is shown by the green horizontal line which is the highest point that the price made on 2nd November 2014. The support is shown by the red line, which is the lowest point formed on 19th September.

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Dow Jones

Dow Jones is trading near an all-time high on the daily time frame. The price is trading in an upward trend and this confirms that the trend is skewed to the upside. However, it is better to wait a break of one of the two levels as shown on the chart to confirm the new short-term direction. Currently, there is a battle between the price and an all-time high and if the price breaks towards the upside, the odds will be even stronger that the uptrend will shape up from there. The Balance of Power shows that the bears are still controlling the momentum. We need to see this fading in order support the above argument.

The resistance is shown by the green horizontal line which is a measured move. The support is shown by the green line, which is the lowest point formed on the 10th September.

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