Thursday’s calendar is stacked

GBPUSD – technical overview

The market recovery out from the March low has stalled out ahead of the 2019 high. Nevertheless, at this stage, setbacks are viewed as corrective, with the price seen very well supported on dips into the 1.2500 area. Look for a higher low ahead of the next major upside extension back through 1.3500 and towards 1.4000 further up.

• R2 1.3268 – 19 August high – Strong
• R1 1.3177 – 21 October high – Medium
• S1 1.2917 – 28 October low – Medium
• S2 1.2862 – 16 October low – Strong

GBPUSD – fundamental overview

Broadly speaking, the Pound has been very well supported, despite setbacks from risk off flow. Optimism around the prospects for a Brexit deal agreement have been keeping the currency in demand. Key standouts on Thursday’s calendar include UK nationwide house prices, BOE consumer credit and mortgage approvals, US GDP, US initial jobless claims, and US pending home sales.

USDJPY – technical overview

We're seeing signs of a pickup in volatility in the major pair, with the market chopping around quite a bit. Still, there is no clear directional insight, with the price confined to a larger triangle formation. Overall, rallies have been well capped above 110.00 and dips well supported below 104.00.

• R2 106.11 – 7 October high – Strong
• R1 105.75 – 20 October high – Medium
• S1 104.11 – 25 October low – Medium
• S2 104.00 – 21 September low  – Strong

There were no policy surprises from the BOJ on Thursday, with the central bank leaving rates on hold, tweaking economic projections, and committing to being prepared to do more if needed. There was no movement in the Yen on the central bank risk, though we have seen some selling as US equity futures attempt to recover. On the data front, Japan retail sales came in softer than expected. Key standouts on Thursday’s calendar include US GDP, US initial jobless claims, and US pending home sales.

EURCHF – technical overview

The market remains very well capped into offers and the medium-term picture continues to favour the downside. A weekly close back above 1.1000 would be required to take the immediate pressure off the downside.

• R2 1.0916 – 5 June/2020 high – Strong
• R1 1.0878 – 1 September high – Medium
• S1 1.0600 – Figure – Medium
• S2 1.0577 – 25 May low – Strong

EURCHF – fundamental overview

The SNB remains uncomfortable with Franc appreciation and continues to remind the market it will need to be careful about any attempts at trying to force an appreciation in the currency. But the SNB will also need to be careful right now, as its strategy to weaken the Franc is facing headwinds from a less certain global outlook. Any signs of renewed risk liquidation in 2020, will likely invite a very large wave of demand for the Franc that will put the SNB in the more challenging position of needing to back up its talk with action, that ultimately, may not prove to be as effective as it once was, given where we're at in the monetary policy cycle.

AUDUSD – technical overview

Technical studies have turned up in 2020, after the market traded down to its lowest levels since 2003 earlier this year. There is evidence of a longer-term bottom following the latest push back through 0.7000, though at this stage, there is risk for a pullback to allow for shorter term studies to unwind. Next big resistance comes in at 0.7500. Setbacks should now be well supported ahead of 0.6800.

• R2 0.7244 – 9 October high – Medium
• R1 0.7158 – 23 October high – Medium
• S1 0.7021 – 20 October low – Medium
• S2 0.7006 – 25 September low – Strong

AUDUSD – fundamental overview

The Australian Dollar is attempting to recover in Thursday trade as it follows the bounce in US equity futures. Second tier data out of Australia on Thursday was mixed, with NAB business confidence improving, while export and import prices were softer. Key standouts on Thursday’s calendar include US GDP, US initial jobless claims, and US pending home sales.

USDCAD – technical overview

Has been in the process of correcting since topping out earlier this year above 1.4600. At this stage, with the correction well extended, the market is likely to find solid support in the 1.3000 area, ahead of a resumption of gains. Ultimately, only a weekly close below 1.3000 would suggest otherwise.

• R2 1.3421 – 30 September high – Strong
• R1 1.3334 – 28 October high – Medium
• S1 1.3081– 21 October low – Medium
• S2 1.2994 – 1 September low – Strong

USDCAD – fundamental overview

The Bank of Canada left rates on hold as expected, but went ahead and lengthened the tenor of bond purchases. There was selling of the Loonie on this news, with the currency also hit on broader risk off flow and downside pressure in commodities prices. The Bank of Canada did however announce plans to reduce bond purchases from CAD5 billion per week to CAD4 billion. Bank of Canada's Macklem said the Canadian Dollar was stronger than the central bank had assumed at its last projection in July. Key standouts on Thursday’s calendar include Canada weekly earnings and building permits, US GDP, US initial jobless claims, and US pending home sales.

NZDUSD – technical overview

There's a case to be made for a meaningful bottom, after the market collapsed below massive psychological support at 0.5500 earlier this year. The latest break back above the 0.6600 area further strengthens this outlook, with the market back in uptrend mode as per the weekly Ichimoku cloud. Any setbacks are expected to be well supported ahead of 0.6200.

• R2 0.6798 – 18 September/2020 high – Strong
• R1 0.6725 –  27 October high – Medium
• S1 0.6511 – 24 September low – Medium
• S2 0.6489 – 20 August low – Strong

NZDUSD – fundamental overview

The New Zealand Dollar is attempting to recover in Thursday trade as it follows the bounce in US equity futures. Second tier data out of New Zealand on Thursday was mixed, with business confidence revised lower, while the activity outlook was revised up. Key standouts on Thursday’s calendar include US GDP, US initial jobless claims, and US pending home sales.

US SPX 500 – technical overview

Longer-term technical studies are looking quite exhausted and the market is showing signs of wanting to roll over after racing to another record high in early September. The September break below the August low set up a bearish outside month formation, which adds to the case for deeper setbacks ahead. Look for rallies to be well capped ahead of the September record high.

• R2 3590 –  2 September/Record high – Strong
• R1 3419 – 27 October high – Medium
• S1 3269 – 28 October low – Medium
• S2 3208 – 24 September low – Strong

US SPX 500 – fundamental overview

Although we saw a September push to fresh record highs in response to unlimited QE from the Fed and massive US stimulus, with so little room for additional central bank accommodation, given an already depressed interest rate environment, the prospect for additional runs to the topside, on easy money policy incentives and government stimulus, should no longer be as enticing to investors. Meanwhile, tension on the global trade front, geopolitical risk, and ongoing worry associated with coronavirus recovery should weigh more heavily on investor sentiment in 2020.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs and an acceleration beyond the next major psychological barrier at 2000. Setbacks should now be well supported above 1700. Longer-term technical studies are however in the process of unwinding from overbought readings, with the market in search of a higher low ahead of a bullish continuation.

• R2 2016 – 18 August high – Strong
• R1 1974 – 16 September high – Medium
• S1 1848 – 28 September low – Medium
• S2 1800 – Round number – Strong

GOLD (SPOT) – fundamental overview

The yellow metal continues to be well supported on dips with solid demand from medium and longer-term accounts. These players are more concerned about exhausted monetary policy, extended global equities, political uncertainty, coronavirus fallout, systemic risk and trade war threats. All of this should keep the commodity well supported, with many market participants also fleeing to the hard asset as the grand dichotomy of record high equities and record low yields comes to an unnerving climax.

BTCUSD – technical overview

Bitcoin has arrived at a critical inflection point as it retest the 2019 high. If the market can establish a weekly close back above 14k, it will open the door for a fresh upside extension towards the record high. But technical studies are looking stretched after this most recent run, which suggests that the market may have a hard time extending the run right now, instead deferring to a correction and more consolidation.

• R2 14,000– Psychological – Strong
• R1 13,870 – 2019 high – Strong
• S1 12,665 – 22 October low – Medium
• S2 11,900 – 21 October low – Strong

BTCUSD – fundamental overview

Bitcoin has enjoyed a nice recovery since bottoming in March, with the run-up in stocks and ongoing increased adoption and progress in the space contributing to the strong demand. Most recently, Paypal has now officially announced it will be integrating bitcoin in the weeks ahead. At the same time, the market has also stalled out into important resistance, and we see this as timing well for another period of weakness, especially with global equities once again looking vulnerable.

BTCUSD - Technical charts in detail

ETHUSD – technical overview

We've seen an impressive recovery in 2020, with the market pushing up towards $500. This has set the stage for a bigger run to the topside over the medium to longer-term. However, at this stage, the market is currently in the process of correcting since putting in the 2020 high, with a higher low now sought out ahead of that next major upside extension.

• R2 500 – Psychological – Strong
• R1 488 – 1 September/2020 high – Medium
• S1 312 – 23 September low – Medium
• S2 306 – 28 July low  – Strong

ETHUSD – fundamental overview

While there is plenty of Ether demand built up, with so much optimism around prospects for the blockchain, given all of the development going on in the decentralised finance space, macroeconomics will likely play a weighing influence into rallies, with Ether expected to underperform in a risk off backdrop, in light of Ethereum's higher sensitivity and correlation with risk themes. Certainly the news of Paypal integrating Ether has given the cryptocurrency more boost, but we've also seen Ethereum's defi space getting a little overcrowded of late, which could further contribute to future downside pressure.