Market Forecast 16/10/2017
EUR/GBP remains in a bearish trend below 0.8940 and USD/CHF is attempting an upside break above the 0.9770 resistance.
EUR/GBP Forecast – Euro Remains in Downtrend
- The Euro started a new downtrend from the 0.9030 swing high against the British Pound.
- There is a declining channel forming with resistance at 0.8880 on the hourly chart of the EUR/GBP pair.
- Today in the Euro Zone, the German wholesale price Index for Sep 2017 was released by the Statistisches Bundesamt Deutschland.
- The forecast was +0.4%, but there was an increase of 0.6% (MoM) in the WPI.
The Euro after a steady uptrend found sellers above the 0.9020 level against the British Pound. The EUR/GBP pair started a downside move and traded below the 0.8950 and 0.8900 support levels.
The pair even traded below the 0.8880 support level and settled below the 100 hourly simple moving average. A low was formed recently at 0.8855 and the pair is currently correcting higher.
An initial resistance is around the 23.6% Fib retracement level of the last decline from the 0.8929 high to 0.8855 low. Moreover, there is a declining channel forming with resistance at 0.8880 on the hourly chart.
Any major correction from the current levels towards 0.8880 or the 50% Fib retracement level of the last decline from the 0.8929 high to 0.8855 low will most likely face sellers in the near term.
German Wholesale Price Index
Today in the Euro Zone, the German wholesale price Index for Sep 2017 was released by the Statistisches Bundesamt Deutschland. The forecast was slated for a rise of 0.4% in the WPI compared with the previous month.
However, the actual result was above the forecast, as there was an increase of 0.6% in the WPI in Sep 2017. In terms of the yearly change, the market was looking for the WPI to increase by 3.2%. The actual was better, as there was a rise of 3.4%.
The overall result was positive, which could help the EUR/GBP pair in correcting towards the 0.8880 resistance area.
USD/CHF Forecast – US Dollar Attempting Upside Break
- The US Dollar was under a lot of pressure recently and traded below 0.9720 against the Swiss Franc.
- There is a bearish trend with resistance at 0.9765 on the hourly chart of the USD/CHF pair, which is preventing a recovery.
The US Dollar remained in a downtrend and traded towards the 0.9700 handle against the Swiss Franc. The USD/CHF pair traded as low as 0.9704 and later started an upside move.
It managed to move above the 0.9720 resistance and the 100 hourly simple moving average. However, a bearish trend with resistance at 0.9765 on the hourly chart is preventing further gains.
On the downside, the 38.2% Fib retracement level of the last wave from the 0.9704 low to 0.9768 high at 0.9743 and the 100 hourly simple moving average are important supports.
As long as the pair is above the 100 hourly SMA, it might break 0.9770 for more gains in the near term.
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