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EUR/USD – Corrective rebound extends

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  • The pair has broken above the 1.1000/1020 short-term pivotal resistance that invalidated the preferred bearish scenario (click here for a recap). Right now, the pair has broken above the former minor descending trendline from 06 Aug 2019 high and it is likely to be in the midst of shaping an extended corrective rebound in place since 01 Oct 2019 low towards the major descending channel resistance area from 10 Jan 2019 high.
  • Flip to a bullish bias above 1.0985 key short-term pivotal support for another potential leg of the extended corrective rebound to target the next intermediate resistance at 1.1110 (the minor swing high area of 13 Sep 2019 & close to the 50% Fibonacci retracement of the recent decline from 06 Aug high to 01 Oct 2019 low). However, a break with an hourly close below 1.0985 sees a failure bullish breakout for a slide back to retest the 1.0880 swing low area of 01 Oct 2019.

GBP/USD – Watch the 1.2570 major resistance

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  • The pair has broken above the 1.2570 the 1.2290 short-term pivotal resistance and staged a squeeze up of 170 pips to print a high of 1.2469 in yesterday, 10 Oct U.S. session on the backdrop of a positive Brexit news flow; U.K PM Boris Johnson had a “positive and promising” meeting with Irish PM Varadkar over Irish border backstop. Also, yesterday’s intraday performance with a gain of 228 pips from Asian opening level of 1.2206 is the best so far year to date.
  • The pair is now coming close to retest the major resistance of 1.2570 (the upper boundary of the descending channel from 13 Mar 2019 high & the former ascending support from 07 Oct 2016 low). Mix elements now; prefer to turn neutral between 1.2570 and 1.2330. Only an hourly close below 1.2330 revives the bearish tone for a slide to retest 1.2200 in the first step.
  • On the flipside, a clearance with a daily close above 1.2570 is likely to trigger a further rally towards 1.2760 (swing high area of 10/25 Jun 2019 & upper boundary of an impending minor ascending channel from 03 Sep 2019 low).

USD/JPY – Watch the 108.50 minor range resistance

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  • The pair has broken above the 107.70 short-term pivotal resistance on the backdrop of a “promising” U.S-China trade talk where market participants have been guided to expect a “partial deal” based on President Trump’s series of tweets.
  • Mix elements as the hourly RSI oscillator has flashed a bearish divergence at its overbought region which indicates upside momentum of yesterday’s push up has started to ease. Prefer to turn neutral now between 108.50 and 107.35. Only an hourly close below 107.35 revives the bearish tone for a slide to retest 04 Oct 2019 minor swing low of 106.55.
  • On the flipside, a clearance with an hourly close above 108.50 sees a further squeeze up towards the major resistance of 109.30/50.

AUD/USD – Watch 0.6810 minor range resistance

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  • The pair has staged a breakout above the minor descending resistance from 12 Sep 2019 high. Mix elements still prevail, prefer to maintain neutral stance with an adjusted upper range of 06810 (minor swing high area of 20/24 Sep 2019 high & 61.8% Fibonacci retracement of prior slide from 12 Sep high to 02 Oct 2019 low) and 0.6715.
  • Bears need to have an hourly close below 0.6715 to reinforce the start of a potential downleg sequence to target the next support at 0.6620 in the first step.
  • On the flipside, a clearance with an hourly close above 0.6810 sees a further corrective rebound to retest the 12 Sep 2019 swing high area of 0.6890.

Charts are from eSignal

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