Daily Market Report -EUR/USD Finding Sellers October 06, 2017

EUR/USD Targeting New Lows

Price dropped and resumed the yesterday’s bearish candle. The dollar has taken the lead on the short term again as the dollar index has managed to close much above the 93.81 horizontal resistance. USDX has jumped above the 94.00 psychological level and tries to reach new highs. A further USDX’s increase forces the USD to dominate the currency market on the short term.

Personally, I’m still waiting for a retest of the 93.81 broken resistance before will climb much higher. I’ve said in the last weeks that only a valid breakout above the 93.81 obstacle will announce a larger rebound and a potential reversal. Is premature to talk about a reversal on the dollar index because is still trapped below some important resistance levels.

You should know that the rate will be driven by the fundamental factors in the afternoon, the US is to release the Unemployment Rate, Average Hourly Earnings, and the NFP.

Price drops after the retest of the median line (ml) of the descending pitchfork. EUR/USD has finally managed to close below the 1.1711 horizontal support and now moves towards the median line (ML) of the major ascending pitchfork. Technically, it is expected to drop further and to ignore the ML, but we’ll see what impact will have the US data in the afternoon because a disappointment will send the pair higher again on the short term.

Technically, we may still have a Head and Shoulders pattern on the Daily chart, which could confirm a larger drop.

GBP/USD Accelerates The Sell-Off

GBP/USD drops further on the short term and seems too heavy to be stopped. Price has broken through the confluence area formed at the intersection between the 250% Fibonacci line of the ascending pitchfork with the median line (ml) of the descending pitchfork. The pair is almost to hit the 1.3046 static support, where he could find temporary support. The breakdown below the 250% line and below the median line (ml) still needs confirmation. I’ve said in the previous reports that a valid breakdown will conform a larger drop.

Brent Oil Poised For Further Drop

Brent Oil rallied in the yesterday’s session, but failed to close above the median line (ML) of the major ascending pitchfork. Price is trading in the red right now and tries to stabilize below the 250% Fibonacci line (descending dotted line). I’ve said in the previous days that a retest of the ML followed by a minor drop will confirm a larger drop in the upcoming period. Only a valid breakout above the ML and above the 57.72 will validate an increase at least till will reach the 59.50.

By Olimpiu Tuns – Market Analyst

I graduated a Master in Business Administration, I am a Market Analyst / Trader on Financial Markets (forex, commodities, futures, options) for more than 6 years, I use technical and fundamental analysis for my daily activity. Founder and Market Analyst at ovtbusiness.com (Financial Markets Blog) and contributor on investing.com, actionforex.com, countingpips.com, forexalchemy.com, etc.

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