The correction in the markets is gaining the power

The markets reacted to the results of the meeting of the Federal Reserve System by widely strengthening of the US dollar. The quotes of the most liquid currency pairs with the presence of the dollar, depending on the base currency in the pair, have overcome their support (or resistance) zones. They also demonstrate the preservation of Thursday-trends in the first hours of Friday. At that way, in recent days there is a practical implementation of a set of signals from technical analysis during the last few weeks that indicating a high probability for the beginning of the period when the dollar gain power. Today’s day, again, like yesterday’s, is saturated with macroeconomic data. Special attention will be paid to the following indicators: – at 10:55 Moscow time there will be a block of data on the labor market in Germany for September. The unemployment rate is expected at 5.2%, which is the lowest level in the last few years. In the case of strong statistics, we can expect a decrease in the rate of weakening of the European currency against the US dollar. – at 11:30 Moscow time, the final data on UK GDP for the 2nd quarter of this year are published. The indicator is projected at 1.3% (yoy). If the actual value coincides with expectations, the British pound may slow down in its weakening in the GBP / USD pair. – at 12:00 Moscow time, it will be published a block of consumer inflation in the euro zone for September. The prediction in annual terms is at 2.1%, which coincides with the statement made a few days earlier by the head of the European regulator, Mario Draghi, about the expected acceleration of core inflation. – at 15:30 Moscow time, a block of data on personal expenses and incomes in the US for August is published. These indicators should demonstrate the confidence of consumers in the dynamic development of the US economy, which will positively affect the US dollar. – at 15:30 Moscow time, the data on Canada’s GDP in July. In annual terms, the value of the indicator is expected at 2.2%. The actual data will have a significant impact on the dynamics of the USD/CAD pair. Today, the markets are projected to maintain the trend of yesterday’s trading, characterized by the strengthening of the US dollar, which received a positive impulse due to the constancy of the tough position from the Federal Reserve System.

EUR/USD

During Thursday and the first hours of today, the EUR/USD pair consistently broke down significant support zones located in the areas of 1.1700-1.1710 and 1.1645-1.1655. The first of these zones for a long time was the resistance, which was broken up a week ago with the background of the weakening from the US dollar, observed throughout September. Through the second of these zones passes 200-periodic MA on the H4 time frame. The breakout of this moving average indicates a change of trend in the market. Based on this, it is predicted a gradual return of quotations to the internal area of the medium-term downtrend channel, in which the pair traded since the beginning of May this year (that is, the area below 1.1550). But not today. Today, the area of support is 1.1585-1.1600. Resistance is present in the range 1.1700-1.1710.

EURUSD H4

GBP/USD

Yesterday, the GBP / USD pair was projected to fall into the region of 200-periodic MA on the time frame of H4 in the area of 1.3020-1.3045. However, the quotes did not reach the mentioned marks. It is projected that these goals will be achieved today. Perhaps the negative dynamics will gain impulse after the publication of data on the GDP of Great Britain for the 2nd quarter. It is worth noting that the assumption of a short-term (several hours, possibly until Monday) consolidation is based on the emerging convergence between local minimums of quotations and the corresponding values of the MACD indicator on the time frame of H1. The support zone is in the area of 1.3020-1.3045 (green oval). The resistance zone is present in the range 1.3100-1.3125 (red oval).

GBPUSD H4

USD/JPY

The sharp strengthening of the US currency on world markets has refuted the predicted decline in the quotes of the pair USD / JPY in yesterday’s review. Because of growth, prices reached the area of 113.50-113.60. However, I am still on the point of view that in that pair the gradually strengthening of Japanese yen is foreseen. This position is based on a set of signals of a technical nature, indicating the corrective movement. Yesterday’s dynamics is an emotional reaction of the players to the general strengthening of the US dollar following the results of the Fed meeting this week. Whether this point of view is correct or not, we will find out during the oncoming trading sessions. The support zone is present in the range 112.75-112.95 (green oval). The resistance zone is in the region of 113.50-113.65 (red oval).

USDJPY H4

USD/CHF

At yesterday’s trading quotes of the USD/CHF pair showed a significant increase, implementing a set of signals of technical analysis. Prices were able to overcome up 200-periodic MA on the H4 time frame, passing through the 0.9735 mark. In the first hours of Friday quotes stabilized around 0.9765-0.9770. Today, despite the predicted further strengthening of the US currency in world markets, in that particular pair it is supposed to stabilize prices with the possibility of a slight decrease down to the moving average region. The support zone is in the area of 0.9695-0.9710 (green oval on the chart). The resistance is located in the range of 0.9765-0.9775 (red oval).

USDCHF H4

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