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Incredible rally on light crude oil

The December contract for light crude oil rallied for today to the 46.00 zone after the oil inventories came out lower than expected. This has caused traders to close their short positions rapidly, causing a short squeeze. At the moment, the 46.00 level may act as a resistance and oil may try to bounce from that level to the downside, especially because the 55 day exponential moving average is very close to that zone. If the price bounces to the downside, then the 44.00 level may act as support. To the upside, if the price breaks above the 46.00 level, then the bullish momentum may accelerate and oil could go and visit the 50.00 level once again.

EUR/JPY: Possible breakdown below the 133.00 level

The Euro versus the Yen has come back to its bearish trend amid a rise in risk aversion, which has caused the Yen to strengthen. At the moment, the pair is trying to break below the 133.00 round number level and if the breakdown is confirmed then we could see a visit to the 132.00 level. To the upside, if the price goes back above the 133.00, then the 134.00 could act as its next resistance.

Possible breakdown from the 44.00 level on light crude

The 44.00 level has been a very good support for light crude oil since the end of August and even though the price has tried to break it to the downside, it has always bounced back to the upside. However, oil has had a very good sustainable downtrend as we can see on the daily chart and it is possible that this time the price is falling with enough force to break below the 44.00 level. If the 44.00 level is breached to the downside, then the bearish momentum may accelerate and the price may try to go and visit the 40.00 level. But if the price bounces from the 44.00 to the upside, then the 46.00 may act as a resistance.

The USD/CHF reaches a resistance zone

The Dollar has been strengthening versus the Swiss Franc due to the fact that if the European Central Bank expands its economic stimulus, then most probably the Swiss National Bank would have to lower its interest rates even more, which are currently already in negative territory. The 0.9800 level could act as a resistance as we can see on the daily chart and from there the price may try to bounce to the downside. However, if the price breaks above that level, then the next round number level of the 0.9900 could act as resistance. To the downside, the 200 day exponential moving average around the 0.9572 level could act as support.

Platinum keeps its bullish trend

Even though the commodities sector has been in a downtrend, platinum has kept a very good bullish trend as we can see on the daily chart. During the last few days, platinum has taken a break after hitting a high at the 1023.87 level, but this consolidation could just be a resting point to continue going higher. If it breaks above the 1023.87 level, the price may find some resistance at the 1035.85. There is also the probability of seeing a retracement to the downside, therefore if the price breaks below the 997.46, the bearish momentum may accelerate.

Volatility with no direction on the EUR/USD

The Euro versus the Dollar has stayed inside a range between the 1.1300 level as support and the 1.1400 as resistance. The lack of fundamental announcements from the Eurozone and from the US has kept the pair much undecided. Tomorrow we have the European Central Bank meeting and speech and probably investors and traders are waiting for this information before taking any bets on the EUR/USD. Even though during the last few days we can see a consolidation on the daily chart, we have actually detected a breakdown of the last bullish trend. However, the price may try to go back up and if it breaks above the 1.1400 level, it may try to go and visit the 1.1500. Below the 1.1300, its next important support could be the 1.1200 level.

Oil keeps its bearish momentum

Oil keeps its downtrend and has entered again the previous consolidation area below its 55 day exponential moving average (purple line). At the moment, crude may find some support at the 45.69 zone, but if it breaks that level to the downside, then it may try to go and visit the 44.00. To the upside, the 50.00 level may continue acting as a resistance.

Good resistance on the Mexican Peso

The Mexican Peso along with most of the emerging market currencies has been suffering strong drops versus the Dollar, but on the 4 hour chart of the USD/MXN we can see how the Dollar has been losing strength versus the Mexican Peso and it seems like it has formed a bearish channel. The pair has made some bullish retracements inside the channel, but the 55 period exponential moving average (purple line), has acted as a good resistance. That is why now that the price is visiting once again that moving average, it may act as a resistance and the price may try to bounce to the downside. If the price bounces to the downside, then the low at the 16.32 level may act as a support. If it breaks to the upside, the 200 period exponential moving average (blue line), may act as a resistance.

Copper retraces to the downside during today’s session

Copper has had a good uptrend for the last few weeks as we can see on the daily chart of the December contract. During the last few days it has stay consolidated just above the 55 day exponential moving average (purple line), which has acted as a good support. Today we see that the price has retraced to that moving average, but it could continue rallying. If the price continues rallying then its next resistance could be the 249.31 level. Above the 249.31 level, its next resistance could be the 200 day exponential moving average (blue line) at the 257.56. If it breaks below the bullish trendline, then its next support could be the low at the 222.66 level.

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Follow-up on the “Rising Wedge” of corn

A few days ago we identified a Rising Wedge formation on the daily chart of corn and we said that it would probably take it a few more days before breaking to the downside. However, today we see that the price has broken below the lower trendline of the rising wedge and the bearish momentum may accelerate from this point on. The target of the rising wedge is the lowest level of the formation, meaning the low at the 345.54 level. Even though the price may do some retracements along the way, it is possible for the price to reach that level. If the price goes back inside the formation, then the pattern will be invalidated and the 399.50 level could act as resistance.

Possible Pennant on the EUR/JPY

On the daily chart of the EUR/JPY we can see that the last few candles have had small real bodies with short shadows in both directions. This has created what it appears to be a Pennant formation. Usually, a Pennant formation acts as a continuation pattern, where the price continues in the direction where it was coming from. Therefore, there is a good chance that the price may try to continue going higher after the current consolidation, but a bullish breakout will not be confirmed until the price breaks above the 137.00 level. Since the price may also break to the downside, a bearish breakout will not be confirmed until the price breaks below the 136.00 level.

Rising wedge on Corn

On the daily chart of corn we can see that the price has been oscillating, but it has a small inclination to the upside where the highs have been higher than the previous ones and the lows have also been higher than the previous ones. This has formed what it appears to be a “Rising Wedge” formation. The rising wedge formation usually acts as a bearish reversal pattern, where there are more probabilities of seeing a breakout below the lower trendline. However, we must keep in mind that this is a daily chart and the price may try to go higher for the next few days before attempting a bearish breakout. If the price breaks to the downside, then it could target the 345.54 level. On the other hand, to confirm a breakout to the upside, the price would have to break above the resistance zone between the 399.50 and the 404.69.

Double bottom on the USD/CAD?

The US Dollar versus the Canadian Dollar reached a low on Friday on the 1.2900 level. During today´s session the price reached again that 1.2900 level to bounce to the upside to the 1.3000 level. It is possible for the 1.3000 level to act as a resistance, but it could also be the confirmation line of a double bottom formation. Since the price has been falling for the past few weeks, as we can see on the daily chart, if the price breaks above the 1.3000 level, it could signal a possible change in direction or a correction. Above the 1.3000 level its next resistance could be the 1.3200. Below the 1.2900 level, its next support could be the 1.2800 level.

Moving average confluence on the Nasdaq

The Nasdaq has closed the week to the upside and is keeping a very good rally from almost two weeks ago. However, the 55 day and the 200 day exponential moving averages have been practically on the same level since the beginning of the week, around the 4327 area, which is an indication that the index may try to go into a consolidation. But if the index continues going higher, then its latest high around the 4442 could act as resistance. To the downside, there are no important support levels on the daily chart for the Nasdaq until the low at the 4041 level.

The EUR/NZD keeps its bearish correction

The Euro versus the New Zealand Dollar has been retracing to the downside after a big rally. The pair breaks below the 55 day exponential moving average (purple line), around the 1.7294 level, but it has found some support around the 1.6866 level. From this current zone, the pair may try to retrace to the 55 EMA, which in such case would be completing a breakout and retracement pattern, giving us a possible short entry. If the pair continues dropping, then the 200 day exponential moving average (blue line), around the 1.6422 level could act as support.

Bullish trend on sugar

The sugar contract for March of next year has kept a very good bullish trend as we can see on the daily chart. After it made a low at the 10.11 level, sugar rallied to the 11.00 zone to consolidate around that area for a few weeks. But the bullish momentum comes in again and the price breaks above the 12.00 level to go and visit the 200 day exponential moving average, around the 12.67 level where it tried to stall due to the fact that the zone had acted as a good resistance in the past. However, the price then breaks above that EMA and it rallies to the 14.00 level. The stochastics are around the 100% level, due to the strong rally that the price has made, but it is clearly over-bought and a bearish correction may come in from the current levels. None the less, if the price breaks above the 14.00 level, then its next resistance could be the 15.00 level.

Bullish breakout on Light Crude Oil

The OPEC chief has said today that a drop in oil investments could hurt oil production and this has caused oil to rally and breakout of the recent consolidation that it had as we can see on the daily chart of light crude oil. The price has finally broken above the 55 day exponential moving average and above the upper trendline that was forming the apparent descending triangle. The bullish momentum accelerates and the price reaches the 49.00 zone. It is possible for oil to continue going higher, but the 50.00 level could act as a temporary resistance on crude.

Consolidation continues on Light Crude Oil

Light crude oil or WTI continues in a tight consolidation with the 44.00 level acting as a very good support. To the upside, the 55 day exponential moving average (purple line) has acted as a good resistance, not allowing the price to break above that zone. The highs of the daily candles appear to be lower than the previous ones, forming what it appears to be a descending triangle. During a descending triangle formation the energy accumulates at the lower support line, making it more probable to break to the downside. If the price breaks below the 44.00 level, then the bearish momentum may take it to the 40.00 level. To the upside, the 50.00 level could act as a resistance.

Bullish flag on the AUD/USD

A bullish flag is a continuation chart formation where the price after having a bullish trend comes into an area of consolidation and forms a channel with a small inclination to the downside. It is called a bullish flag, because the price tends to continue going higher after it breaks out of the consolidation.

On the AUD/USD 4 hour chart we can see that the price has formed a bullish flag just below its 200 period exponential moving average (blue line). From this point on, if the price continues going higher it may find some resistance around that 200 period exponential moving average. But the price may also break to the downside and if it does so, the area of the 0.6936 level could act as support. The stochastics are pointing down due to the small inclination to the downside that the channel forming the flag has, but it could also change to the upside.

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