USDCAD TECHS: Bull Cycle Intact

• RES 4: 94.24 1.618proj of the Sep 3 - 11 - 26 price swing  
• RES 3: 94.00 Round number resistance        
• RES 2: 93.95 1.500 proj of the Sep 3 - 11 - 26 price swing
• RES 1: 93.93 High Oct 22   
• PRICE: 93.28 @ 08:04 GMT Oct 27
• SUP 1: 92.66 Low Oct 21       
• SUP 2: 92.24 20-day EMA 
• SUP 3: 91.82 High Sep 24 and a recent breakout level
• SUP 4: 91.01 Low Oct 13    

A bull cycle in Gilt futures remains intact and last week’s gains strengthen the bullish condition. The clearance of 93.17, the Oct 17 high, confirms a resumption of the uptrend and signals scope for an extension towards 93.95 next, a Fibonacci projection. Note that the contract is overbought, a pullback would allow this condition to unwind. Firm support to watch lies at 92.24, the 20-day EMA.

• RES 4: 0.6660/6707 High Sep 18 / 17 and a bull trigger
• RES 3: 0.6629 High Sep 30 & Oct 01 and key short-term resistance
• RES 2: 0.6574 50.0% retracement of the Sep 17 - Oct 14 bear leg 
• RES 1: 0.6548 Intraday high 
• PRICE: 0.6537 @ 08:11 GMT Oct 27
• SUP 1: 0.6440 Low Oct 14
• SUP 2: 0.6415 Low Aug 21 / 22 and a bear trigger
• SUP 3: 0.6373 Low Jun 23
• SUP 4: 0.6357 Low May 12  

AUDUSD continues to trade above its recent lows. Attention remains on the Oct 14 reversal pattern - a hammer candle. It signals the end of the bear cycle that started Sep 17. Note that the initial firm resistance at 0.6541, the 50-day EMA, has been pierced. A clear break of this hurdle would strengthen a bullish theme. For bears, a breach of 0.6440, the Oct 14 low, would instead cancel the reversal pattern and reinstate a bear threat. 

• Hopes for a trade deal between China and the US (triggered by positive language from Trump this weekend) has tipped the AUD to be the best early performer in G10 , up 0.5% against the USD through the European open. As such, AUDUSD has reached the best level in 11 sessions and the next resistance is now seen towards 0.6573.
• More broadly in G10, the USD is mixed, keeping the USD Index close to flat as markets prepare for the FOMC meeting on Wednesday, at which markets are fully priced for a further 25bps rate cut (and another in December).
• Today sees, German IFO and ECB inflation expectations while the US durable goods orders print will not be released due to the Government shutdown.