Contributed by: DailyFx
Next week will be critical for the EURUSD as the pair stands at the crossroads as of late. Indeed, price action is capped by 1.40, and after the break below the rising channel, which remained intact for approximately a month, my bias remains to the downside. Taking a look at the weekly chart, the EURUSD looks poised to close above the 200-day moving average for the third street week, and if price action holds above this level next week, this could spell trouble for the greenback in November. Not to overlook, the pair has stalled at the 50-day SMA on the monthly chart. All in all, downside risks remain so long as price action does not close above 1.40. The FOMC rate decision and the Nonfarm payrolls release from the world’s largest economy next week may serve to be the catalyst needed for the buck. At the same time, I am still short the EURGBP and my position is currently in the money. Going forward I will look to target 0.8650 as technical indicators continue to point to further losses in the pair; stop at 0.8830. GBP traders will shift their focus to the U.K. interest rate decision and asset purchase target.
Going forward, I will look to enter a long GBPUSD position on a break and close above 1.600. The BoE rate decision is on tap and may serve as the next push for British pound as the pair bounced off key support at 1.5600. Meanwhile, a long USDCHF position is on the horizon as the price action has worked its way into an ascending channel, and now looks poised to test parity next week. With reference to the AUDCAD, I closed out my position slightly out of the money as the pair will close below the 20-day moving average. Taking a short position at today's close, with a target of 0.9860 may suffice. Good luck trading!!!