Watching the foreign exchange market on October 25th: technical analysis of the euro, the pound sterling and the Australian dollar

Currency: EUR/USD



Resistance 2: 1.1750

Resistance 1: 1.1670

Spot price: 1.1645

Support 1: 1.1595

Support 2: 1.1525

The euro/dollar rose for two consecutive weeks and closed near 1.1630. The EUR/USD weekly chart shows that the EUR/USD hit 1.1670, which is the 38.2% retracement of the 1.1908 and 1.1523 declines. Now, the euro/dollar is consolidating near the moderately bullish 100 moving average, but it is more than 100 points below the stable and bearish 20 moving average, which shows that the bulls are still holding a wait-and-see attitude. Relative strength indicators and momentum indicators are in the negative zone and below the September highs, increasing the trend of weak bulls. The daily chart shows that the euro/dollar is expected to fall further. The euro/dollar consolidates in the Fibonacci zone, and the 23.6% retracement of the above-mentioned decline constitutes support near 1.1615. The 20-day moving average is below the current price, but it still maintains a bearish trend because the technical indicators are in the neutral zone and the direction is unknown, which seems to have lost bullish momentum. If the euro/dollar falls below the above support, it is still expected to continue to fall to the low of 1.1523 during the year. If the euro/dollar falls below this level, it will test the long-term support near 1.1470. If the bulls step up their efforts and rise above 1.1670, the euro/dollar will see a consolidation increase, which may be close to 1.1720, and then rise to 1.1840.

Currency: GBP/USD



Resistance 2: 1.3917

Resistance 1: 1.3857

Spot price: 1.3773

Support 1: 1.3730

Support 2: 1.3668

Last Friday, the currency pair saw some intraday selling and fell to a two-day low near 1.3770. This was a reaction to the dismal British retail sales, which unexpectedly fell 0.2% in September. Excluding auto fuel sales, core retail sales fell 0.6% per month, adding to signs of weak economic recovery. Earlier this week, the weaker UK consumer inflation data released earlier this week dashed hopes that the Bank of England will raise interest rates in November. Facts have proved that this is a key factor dragging down the pound, which has brought some downward pressure on the pound against the dollar, although the downward pressure seems to have eased. However, investors seem to be convinced that the Bank of England will eventually raise interest rates from record lows by the end of this year. . On the daily chart, the pound and the United States have been in a continuous downward trend since reaching a high of 1.3983 on July 30, and the downward trend line has become a strong obstacle to its upward trend. In addition, the pound and the United States are below the 100-day moving average, which also strengthens the current downward momentum. If the currency pair maintains its intraday high, it may return to the 1.3800 psychological barrier and break the 100-day moving average, which will pave the way for it to reach the 1.3850 resistance level. If it continues to go down, it may drop to 1.3655, the October 14 low.

Currency: AUD/USD



Resistance level 2: 0.7550

Resistance 1: 0.7500

Spot price: 0.7458

Support 1: 0.7400

Support 2: 0.7330

After the Australian dollar hit a high of 0.7548 last Wednesday, it slightly retraced under the pressure of profit-taking. The weekly chart of AUD/USD maintains a bullish trend, the AUD/USD is breaking through the 20 SMA, and the moving average remains downward. The technical indicators cross the midline and are in the positive zone, maintaining uneven momentum, indicating that the bulls are dominant. The daily chart shows that the AUD/USD is finishing extremely overbought, and it is currently finishing near the 23.6% retracement of the latest daily gain. The technical indicators have partially lost their bearish momentum, and to a certain extent, the expectation that the exchange rate will fall in order before it rises. The 38.2% retracement of the above uptrend is at 0.7400, and buyers are expected to increase their entry here to maintain the bullish trend. If the AUD/USD drops below this level, it may test the 0.7300/20 area. On the other hand, if the AUD/USD breaks through 0.7550, it may extend this round of rebound to the 0.7620 level.

Only personal views, not representative of the views of the organization

Source: Bank of China's official website, Bank of China Guangdong Branch Wang Gang, original title: "Foreign Exchange Market Watch October 25, 2021"