Daily Forex Market Preview, 10/10/2016
The US dollar edged higher on the open on the back of the just concluded second presidential debate, giving another victory to Democratic candidate Hillary Clinton. Once again, it was the Mexican peso which posted strong gains within a few hours of the open as the markets saw less chance for a victory by Republican nominee Donald Trump. The markets are closed across Japan, US and Canada today and trading is likely to remain slow for the most part.
XAUUSD (1262.35): Gold prices closed with a doji/spinning bottom on Friday, and the current price action is showing a potential reversal off the $1250 handle. A continued momentum could keep gold prices supported to the upside as long as the support at 1250 holds. The upside correction could see gold likely to retrace back towards the 1310 - 1300 level which previously held as support. A retest back to this level, to test for resistance supports the bullish short-term view in gold.
USDJPY (102.91): The US dollar gapped higher on the open at 103.24Yen, but the price has been edging lower. A break below Friday's low of 102.86 could trigger further downside towards 102.00. However, the support level of 103.00 could potentially offer some short term support despite price currently trading below this handle. The upside could be limited towards 103.70 - 103.50 region to establish minor resistance. Alternately, a continued decline below 103.00 could see USDJPY extend the declines towards the next main support at 102.00 - 101.61.
AUDUSD (0.7592): AUDUSD completed the head and shoulders pattern noted last week with prices briefly testing the measured target of 0.7555 before quickly pushing back higher. Prices are seen retesting the neckline support at 0.7610, but the further downside can be expected for a more firm test back to the level of 0.7555. A break below 0.7555 could trigger further downside towards the next support at 0.7515. The bearish view could be invalidated if prices settle back above the neckline resistance of 0.7610.