Daily Market Report – GBP/USD Keeps Rallying October 12, 2017

GBP/USD Throwback In Play

The GBP/USD rallies and tries to reach new highs on the short term. GBP has taken the lead again and appreciates versus all its rivals not only against the greenback. The dollar drops versus all its rivals as the USDX has touched new lows even if the FOMC Minutes have signaled a potential rate hike in December. The USDX dropped much below the 93.00 psychological level and should drop much deeper in the upcoming days. USDX is still expected to approach the 92.49 static support, where he may find support again. Most likely the dollar index will develop an Inverse Head and Shoulders pattern on the Daily chart, which will signal a USD dominance in the upcoming weeks.

The USD is somehow expected to climb much higher in the upcoming weeks ahead of the December potential hike.

The GBP/USD is trading in the green and ignored the outside sliding parallel line. Price is challenging the 1.3268 static resistance and is expected to take this out as well and to approach the upside line of the ascending channel.

I’ve said in the previous reports that the perspective remains bullish on the short term as long as is trading within the ascending channel between the 150% and 250% Fibonacci lines. A retest of the 250% Fibonacci line will confirm an increase towards the upper median line (uml) of the minor descending pitchfork.

EUR/USD Euro On The Run

The EUR/USD increased and extended the upside momentum as the USD is weakened by the USDX’s massive drop. Price has managed to breakout above the median line (ML) of the ascending pitchfork and is almost to reach the 1.1910 next upside target. Technically, it should approach and reach also upper median line (uml) of the minor descending pitchfork. A valid breakout will announce a further increase, the next major target will be the 1.2041 horizontal obstacle.

USD/JPY Still Heavy

Price is trading in the red on the short term and still tries to reach new lows. A further drop will be confirmed only after a valid breakdown below the 111.98 level. Technically, it should drop after the false breakout above the median line (ml) of the minor ascending pitchfork, but it was paused by the Nikkei’s rally.

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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