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Technical Outlook October 21, 2016

21 October 2016
EURUSD

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The currency pair had a sharp short term momentum after European Central Bank head’s comments. He made hints on the probability of further extension of their bond buying programme. Those comments confused investors for a while. However, the situation stabilised as there are no reasons to end current bond buying programme on March. There are no signaificant changes in the Eurozone economics to undertake such steps. The currency pair declined as investors believe, that the European central bank is going to extend its QE programme. There is no important data in today’s agenda. However, some FOMC members are going to give their comments. There was an opportunity to open short trades after Mario Draghi comments according to our recommendations.

There is no trend on the Weekly chart as the price is close to the MA55 balance line. The currency pair declined significantly last week. We expect EUR/USD to have an upside correction during this week. However, after the ECB meeting, the currency pair continued to decline.

There is the downtrend on the Hourly chart as the price is below the MA55 balance line and the MA-channel goes downwards. We advise to open short trades from the MA55 balance line.



GBPUSD

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The currency pair had a change in its tendency after weak UK Retail Sales data and stronger than expected US data. There was a correction towards 1,22000 and we expect it to continue today. We gave no recommendations to trades in the opposite direction of the current trend. However, there is the probability of reverse and we advise to consider short trades.

There is the downtrend on the Weekly chart as the price is below the MA55 balance line. The currency pair declined last week and there is a probability that GBP/USD continues this tendency in the nearest future.

There is the downtrend on the Hourly chart as the MA-channel goes downwards and the price is below the MA55 balance line. You may try to open short trades from the MA55 balance line or from the trendline on the Hourly chart.



AUDUSD

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There was a huge correction yesterday and we expect it to continue today. However, we think that the breakthrough of the trend line on the Weekly chart is done. It may be cancelled only if the price continues to decline aggressively. If this breakthrough is true, the currency pair is going to continue its growth next week.

The uptrend is still in progress on the Weekly chart as the price is above the MA55 balance line. There is no sharp decline of the currency pair and the scenario for AUD/USD to go towards 0,71800 may be cancelled.

There is the downtrend on the Hourly chart as the MA-channel goes downwards and the price is below the MA55 balance line. We advise to take no decisions today as the situation is still unclear.



USDCHF

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The currency pair has finally left its tight range and went upwards. There is a strong resistance on the Weekly chart but we expect the growth to be limited as it is Friday today. We think that the currency pair may correct towards the Ma55 balance line.

There is no trend on the Weekly chart as the price is fluctuating around the MA55 balance line. The currency pair had some growth last week according to our expectations. We expect USD/CHF to have no direction this week.

The uptrend is progressing on the Hourly chart as the MA-channel goes upwards and the price is above the Ma55 balance line. We advise to take no decision today as the situation is still unclear.

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