The Dollar rallies

The Dollar rallied for today after the Bank of Japan took its interest rate into negative territory and the fundamental data out of the United States came out in line with what was expected. The Gross Domestic Product reading has come out practically in line with what investors and trades were waiting for. This has caused the Dollar to strengthen again. The Euro, the Pound, and the Yen all dropped versus the Dollar as risk appetite comes into the markets. The EUR/USD could find some support at the 1.0800 or the 1.0700 level, but the pair remains consolidated, trading in a range.

Possible production cut on oil

Oil rallies for today after it was rumored of a possible production cut deal among some oil producing countries. That has made the price of light crude oil or WTI to rally close to the 35.00 level for today. Above the 35.00 level, the 37.00 could act as its next resistance. To the downside, the 32.00 level could act as support as shown on the daily chart.

Gold nears its 200 day EMA

The 200 period exponential moving average could work as a very good support or resistance zone, especially on the higher timeframes. On the daily chart of gold we can see that the price is getting near the 200 day exponential moving average or EMA. According to the chart, the price has not visited that moving average in a long time; therefore, it is possible to see a bearish bounce from there if the price reaches the 1128 zone. To the downside, the 1113 level could act as support.

The USD/CAD goes back down

On the daily chart of the USD/CAD we can see that the price has been boxed between the 1.4100 level and the 1.4300 level. Even though today the price broke below the 1.4100, it could not stay below that level and goes back up. However, if tomorrow we have another bearish candle, then the pair may have changed trend to the downside. But in order for the pair to change direction, the Canadian Dollar should get stronger helped by oil, but if oil does not rise, then it would be difficult for the pair to continue falling.

Gold goes back up

Risk aversion seems to have come back into the markets and that is probably why gold has gone back up for today. On the daily chart we can see that the high around the 1113 could act as resistance, but it the price breaks above that level, then it may try to go and visit the 200 day EMA, around the 1128 level, blue line. The 55 day EMA, purple line, may act as a support, but below that zone, the low at the 1071 could also act as a support.

Excellent bullish pullback on oil

The March contract for light crude oil has made a very good bullish pullback from the lows around the 28.00 zone to the 32.00 zone. On the 4 hour chart we can see that the price has been breaking to the upside one round number level after the other, but the 32.00 zone may act as resistance and price may go back to its bearish longer-term trend. To the downside, the 30.00 level may act as support in case the price drops back down.

Good pullback on oil

The March contract for light crude oil has made a very good bullish pullback from the 28.00 zone to the 30.00 level. On the 4 hour chart we can see that the price has broken above the 21 period exponential moving average and that could be indicating a possible change in direction. However, the 30.00 level could act as resistance and the price may try to go back down. In case the price breaks above the 30.00 level, then the 31.00 could act as its next resistance. To the down side, its most recent low around the 28.00 level could act as support once again, but we should keep in mind that as that price keeps visiting the same level, the probabilities of breaking it rise.

Japanese authorities are worried about the Yen’s rally

The Dollar versus the Yen rallied for today after certain media sources said that the Japanese authorities are worried about the strength that the Yen has been showing lately. This has made a lot of people think that there could be some intervention by the Bank of Japan. That is why the USD/JPY bounces to the upside from the 116.12 zone. But we still have to see the price breaking above the 118.00 level, because that level has been a good resistance zone.

Pound falls to 2009 lows

The Pound versus the Dollar falls close to the 1.4100 level after the governor of the Bank of England, Mark Carney, said that the central bank is way too off before raising its interest rates. This has caused the Pound to give back its gains versus the Dollar and loses ground versus 31 other currencies. According to Carney, the drop in oil prices has kept inflation low in the UK, and that the British economy is still very weak. Therefore, the GBP/USD may try to visit the 1.4100 level.

Possible lower low on the AUD/USD

The AUD/USD has had a well-sustained bearish trend, tracing lower lows along the way. On the daily chart we can see that below the 0.7000 level the pair was consolidated to continue going lower and making a lower low. This time the price breaks below the 0.6900 level. On the last few daily candles we can see that the price is trying to retrace to the upside, but that retracement is kind of losing its momentum. Price may continue going lower, but the 0.6800 level could become a support.

Longer-term range on the EUR/USD

Lately, the focus in the financial markets has been the Chinese economy and crude oil. The Euro versus the Dollar has not gotten enough reasons to move in a clear direction. The price of the EUR/USD is practically consolidated. This pair is used to having long, sustainable trends that is why now we can see that the pair is really undecided, regardless of the daily volatility. The 1.0900 level has been its mid-point zone. There is no clear trend until the pair breaks above the 1.1000 level or below the 1.0700 level.

The GBP/USD in a resting zone

The Pound versus the Dollar has been falling lately and even though the bearish trend is still in place, during the last few daily candles we can see that the price has consolidated around the 1.4400 level. It is normal for price to try to rest after the big drop, but the bearish trend is still in place and it may try to continue going lower. To the downside, the 1.4300 level could act as its next support. To the upside, in case the price retraces, the 1.4600 may act as a resistance. The 1.4500 level is too close to the current price level, and that is why that level should not be considered an important resistance area.

Market rally did not last that long

The WTI light crude oil came back down to the 31.00. The main commodity currencies fall back down after starting the session to the upside. Even though the Australian Dollar and the New Zealand Dollar started the day to the upside, towards the end of the session the both fall versus the US Dollar along with the Canadian Dollar. The AUD/USD made a high around the 0.7049 level, but then it falls to the 0.6950 level. The NZD/USD made a high around the 0.6590 level, but it also falls to the 0.6520 level. The USD/CAD breaks above the 1.4300 level and it is coming close to the 1.4400 zone. We can clearly see that things have gone bad for commodities and its currencies.

China tries to stabilize the Yuan

Lately, the decision by the People’s Republic Bank of China has been moving the markets in one way and another. Today the Chinese central bank has allowed the Yuan to rally again after it was known that certain government Chinese banks had been buying the Yuan aggressively. On the other hand, this has caused emerging markets and their currencies to have mixed reactions. In Latin America, most indices closed down. In Brazil, Chile, Argentina and Colombia, stock markets closed to the down side, while most of its currencies came back down versus the Dollar, but the Mexican markets closed to the upside. It is possible that the decisions by China will continue affecting these markets and that is why most investors are preferring to keep their capital in safe haven instruments.

Light crude oil is back to 12 year lows

Doubts about the Chinese economy continue hurting the prices of oil and the WTI comes back down to the 32.00 zone. Stochastics are entering the over-sold zone, but due to the fact that the MACD indicator is showing us that the bearish trend is getting stronger, then the price may break below the 32.00 level. If the price breaks below the 32.00 level, then the 31.00 could act as support. In case the price retraces to the upside, the 33.00 could act as resistance.

GBP/USD: Another pair with a strong bearish trend

The Pound continues losing ground versus the Dollar, even though the job’s numbers from the United States came out mixed. The amount of new jobs created in December in the US came out way better than expected, the unemployment rate stayed unchanged at 5%, and the average hourly wages also stayed unchanged. This caused the Dollar to rally initially, but then it dropped again, except versus the Pound. This shows that the Pound is having some internal difficulties that prevents it from heading higher. The last low on the GBP/USD has been the 1.4500 level, if it continues dropping, the pair may reach the 1.4400 level. In case of a bullish retracement, the 1.4700 level could act as resistance.

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11 year lows for light crude oil

Light crude oil or WTI which trades in the United States has reached an 11 year low and touches the 34 Dollars per barrel zone. Since October of last year, oil made a pullback to the 50.00 level, but since then it has been falling with a well-defined downtrend. Due to the fact that the over-production of oil is still in place and demand does not want to rise, it is likely that oil will keep falling in the near future. On the daily chart of the February contract we can see that today after the price broke below the 35.00 level, the bearish momentum accelerated and reaches the 34.00 level. Oil may find some support around the 34.00 level, but if it continues falling it may reach the 33.00. Some analyst are even forecasting the price of oil to fall to 20 Dollars a barrel if the underlying conditions do not change.

The USD/CAD returns to its bullish trend

The USD/CAD has gone back to its bullish trend as oil goes back down. We know that oil and the Canadian Dollar have a positive correlation and that is why when oil drops, the USD/CAD tends to rally. The pair tried to break above the 1.4000 level as we can see on the daily chart, but it stalls around that zone. However, the bullish trend is still in place as shown by the 21 period exponential moving average, yellow line, and it is possible to see a breakout of that level, which could take the pair to the 1.4100 level. To the downside, the 1.3800 could become its most relevant support.

The Yen strengthens on news from China

The Yen strengthened for today versus the Dollar and we can see that the USD/JPY reached a low around the 118.67 level among a rise in risk aversion. The Chinese data came out worse than expected and that has made investors and traders think twice about the Chinese economic contraction, which could have serious consequences on the global economy. The public has rushed into safe haven instruments like the Yen, the Swiss Franc and gold. However, on the daily chart of the USD/JPY we can see that by the end of today’s session, the price tried to correct to the upside. If the price keeps correcting to the upside, then the 120.00 level could act as resistance. To the downside, the 118.67 level or the 118.00 level could act as support.