Monday October 4 2021
The EURUSD starts this week trading off its recent lows, having made a stand at 1.1560/70 which then prompted a small round of profit taking. However, while the EURUSD remains below resistance at 1.1680/1.1700 further losses are expected.
You will find some resistance at 1.1630 ahead of the key 1.1680, only above here would the risk to the downside diminish in the near term.
Support remains at the 2021 low of 1.1560 then 1.1520/1.1500 then 1.1460/1.1440
Although the GBPUSD has recovered well from 1.3420 it may not be out of trouble yet, as it remains below 1.3620.
If cable (GBPUSD) can overcome strong resistance at 1.3620 it will likely go on to test 1.3700 possibly 1.3740.
However, should we top out at 1.3560/80 I would expect GBPUSD to drop back to 1.3460 and possibly retest the 1.3420 low, where break down would see another fall to 1.3300.
Just as we had written USDJPY off as the dullest currency pair ever, it caught a bid from a spike in US Bond yields. We found ourselves at 112.00 in a short space of time. Bond yields are off their peak and the USDJPY has followed.
However, looking at our chart I can see a nice break at out point at 110.40/60 which will now undoubtedly provide support . If this level is tested and holds then a return to resistance at 111.60/80 is likely, possibly even a retest of 112.00/20.
However if 110.40 breaks down you will see further losses to 109.80 possibly 109.20 in extension.
Good Luck this week.