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Steering clear of the U.S. dollar ahead of the midterm elections?

Here’s a simple tech setup to watch on EUR/GBP instead.

Before moving on, ICYMI, yesterday’s watchlist checked out a potential reversal pattern on AUD/USD. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Australia’s AIG services index dipped from 48.0 to 47.7 in October

Australian Westpac consumer sentiment index slumped 6.9% in Nov

Japanese household spending slumped from 5.1% to 2.3% y/y in Sept

U.K. BRC retail sales monitor fell from 1.8% to 1.2% y/y in Oct

Australia’s NAB business confidence index dropped from 5 to 0 in Oct

New Zealand q/q inflation expectations accelerated from 3.07% to 3.62% in Q3

RBNZ Governor Orr reappointed for second term

Japanese leading indicators fell from 101.3% to 97.4% in Sept

China reports largest one-day increase in COVID cases since April

Upcoming Potential Catalysts on the Forex Economic Calendar:

RBA Governor Lowe’s speech at 9:30 am GMT
Eurozone retail sales at 10:00 am GMT
U.S. Congressional elections ongoing
BOE MPC member Pill’s speech at 4:30 pm GMT
Chinese CPI at 1:30 am GMT (Nov. 9)

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: EUR/GBP

EUR/GBP 4-hour Forex Chart

EUR/GBP 4-hour Forex Chart

I’m switching my focus away from dollar pairs as the U.S. midterm elections heats up!

This neat technical setup on the 4-hour time frame of EUR/GBP looks too good to pass up, so I’m keeping a close eye on the nearby support levels.

Can buyers sustain the reversal?

The pair is in the middle of a pullback to the broken descending trend line, which might hold as support moving forward. The handy-dandy Fib tool shows where more buyers might be hanging out.

The 50% Fib already seems to be holding, as it lines up with the .8700 major psychological mark, but a larger retracement might still reach the 61.8% Fib near the former trend line.

Stochastic has already reached the oversold region to signal exhaustion among sellers, but the oscillator has yet to pull higher to confirm that bullish pressure is returning.

Meanwhile, the 100 SMA is still below the 200 SMA, suggesting that the path of least resistance is to the downside.

Earlier today, the U.K. reported a decline in its BRC retail sales monitor, revealing that the higher cost of living continues to weigh on spending activity. On the flip side, the upcoming eurozone retail sales report is slated to show a rebound in consumer spending.