Good rally on the USD/CAD

The USD/CAD has gained a lot of bullish momentum as shown on the daily chart during the past few sessions. The rally may take the price of the USD/CAD towards the 1.3400 level, zone that has acted as a resistance in the past. The Canadian Dollar and oil have a positive correlation, but the recent pick up in oil prices has not been enough to prevent the US Dollar from gaining ground versus the Canadian Dollar. In case of a pullback, the USD/CAD may come back to the 1.3200 zone, where we can find the 200 day EMA (blue line). But for now the bullish momentum is still in place and the USD/CAD may continue rallying.

Possible pullback on gold

God has come very close to the 1266 level as shown on the daily chart, but it has been pulling back during the last few sessions. If gold continues dropping, then it may reach the 200 day EMA, blue line, which could act as a support, due to the fact that the bullish trend is still in place. In the mid-term, gold may continue rising, especially if the 55 day EMA, purple line, crosses above the 200 day EMA, confirming what it is known as a “golden cross”. In other for the bullish trend to be sustained in gold, it must break above the 1266 level, but another possible scenario is that the price of gold may stay consolidated between the 1232 level (200 day EMA) and the 1266 level.

Gold shoots up

Gold had been stuck around the 200 day EMA, consolidating around that zone without taking a clear direction during the past few weeks. The 200 day EMA is currently around the 1232 level, but the price may try to reach the 1266 level, which could act as resistance. The 55 day EMA (purple line) has changed direction to the upside and the angle of inclination is showing us that the bullish trend may be gaining some strength. If the risk aversion continues threatening the markets, then the price of gold may continue higher towards the 1266 level. On the other hand, gold may try to correct towards the 200 day EMA in case of a pullback, which could act as support. But we must be aware that if the 55 day EMA crosses above the 200 day EMA, then the price of gold may continue all the way to the 1300 level. 

Gold resumes its bullish trend

Gold has been consolidating during the past few weeks, oscillating around its 200 day EMA, which is at the 1230 level, but today the precious metal has rallied once again, breaking above the highs that it made around the 1245 level. The uncertainty surrounding the FED decision on interest rates has pushed the traders and investors to seek the safety of gold. The Dollar has been retracing to the downside and due to its negative correlation to gold, this has also supported today´s rally on the precious metal. If the greenback continues falling, then it is possible for gold to keeps its bullish trend and it may try to reach the 1300 level. But we must be aware that on the way up, the price of gold may have some pullbacks. Below the 200 day EMA, blue line, the 55 day EMA, purple line, may act as support in case the price falls to that zone. The 1200 level may also act as a good support zone for gold.

False breakout on the EUR/GBP

The Euro has been weakening versus its main counterparts, including the Pound, even breaking below its 200 day EMA as shown on the daily chat, blue line. The EUR/GBP tried to gain bearish momentum at the beginning of today’s session, but it lost that momentum and comes right back to the 200 day EMA. If the pair does not confirm the breakdown below the 200 day EMA, then a false breakout will be completed. To the upside, above the 200 day EMA, its next important resistance could be the 55 day EMA, which is currently just below the 0.8600 level. But we must keep in mind that the 200 day EMA may also act as resistance and the price of the EUR/GBP may come back down from that area. If the pair goes back down, then its next relevant support may be the round number level at the 0.8300 zone.

Possible bearish breakdown on the EUR/JPY

The EUR/JPY has been boxed between the 200 day exponential moving average, blue line, and the 55 day exponential moving average, purple line. On the daily chart of the EUR/JPY we can see that the price is stuck at the 200 day EMA, but it seems like the bearish momentum is accumulating at that zone, raising the probabilities of a bearish breakdown. If the price of the EUR/JPY manages to break below the 200 day EMA, which is around the 119.79 level, then it may try to go and visit the 119.00 level. Below the 119.00 level, the next support may be the 118.00 level. To the upside, the 55 day EMA may act again as resistance in case the price reaches that zone, but if it breaks above the 55 day EMA, then the 122.00 level may also act as resistance, followed by the 123.00 level.

The EUR/JPY is trapped by the EMAs

The EUR/JPY is currently trapped in between the 55 day exponential moving average (purple line) and the 200 day exponential moving average (blue line). On the daily chart we can see how the 55 day EMA was acting as a support during the month of January, but at the beginning of February, the price breaks below that moving average to go and visit the 200 day EMA, which acted as a support. Normally, when the price bounces from the 200 day EMA and visits the 55 day EMA, it stays bouncing on and off those two moving averages, consolidating without taking a clear direction. The 55 day EMA is acting now as a resistance and the price has gone back to the 200 day EMA where it stalls at the moment. Inside those bounces one could take the opportunity to enter the market, but it is kind of risky, because the price may break out of the consolidation at any moment.  If the price breaks to the upside, then the 122.00 level could act as a resistance, followed by the 123.00 level. If the price breaks to the downside, then the 119.00 level may act as a support, followed by the 118.00 level.

Symmetrical triangle is still in place on the GBP/USD

The GBP/USD has been oscillating up and down around the 55 day exponential moving average, purple line, without taking a clear direction. The range on the daily chart has been narrowing, creating a symmetrical triangle pattern. From this zone, the price could head in any direction; therefore, the best thing to do is to wait for a real confirmation of the breakout, either to the upside or to the downside. The complicated thing about such trendline breakouts is that the price could pullback at any moment. In this case of the GBP/USD, to make sure that the breakout is real, if it breaks to the upside, the price has to rally above the 1.2600 level. If the breakout is to the downside, then it should break below the 1.2300 level. To the upside, the most relevant resistance is at the 1.2800 level. To the downside, any of the levels from the 1.2200 level, the 1.2100 level, or the 1.2000 level could act as support.

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The EUR/USD bounces from the 61.8% Fibo

Today we had the CPI data from the United States, along with the retail sales numbers, which all came out better than expected, causing the Dollar to strengthen versus the Euro and it seemed like the pair was going to continue falling further during today´s session. But we can see on the daily chart that once the price got to the 61.8% Fibonacci retracement, it bounces from that level rapidly to the upside. The long lower shadow on the daily candle is showing us that the buyers came into the market with force. At the moment, the EUR/USD stalls at the 50% Fibo, around the 1.0588 level, but if it continues rising, then the 38.2% or the 23.6% could act as resistance. To the downside, the 61.8% could act as support, but a much important support could be the 76.4% Fibo at the 1.0456 level. 

The Dollar Index keeps its bullish trend

The Dollar index has confirmed the breakout of the 55 day EMA (purple line) and it is currently heading towards the 50% Fibo. It is possible for the 50% Fibo to act as a resistance in case the index reaches that zone, but the most relevant levels that could act as resistance are the 61.8% at the 102.03 level and the 76.4% at the 102.71 level. Today, the comments by Janet Yellen have supported the Dollar, after she said that there may be a need to raise interest rates in the upcoming meeting by the Federal Reserve. Therefore, it is possible for the Dollar to keep rising during the next few weeks. But we could also see a pullback of the index towards the 55 day EMA, which could act as a support, even if it is only temporary.

Trend reversal on the EUR/USD

It is said that when an asset retraces more than 20% of its previous trend, the trend has reversed in the opposite direction. In the case of the EUR/USD we can see on the daily chart that the pair had a good rally from the 1.0350 level to the 1.0840 level from the month of December until the end of January, but then it starts to retrace to the downside. The price of the EUR/USD has already retraced 50% of that rally and we can now say that the trend has reversed to the downside. At the moment, the pair is around the 1.0600 level, which is currently acting as a support, but if it breaks that level to the downside, then the bearish momentum may accelerate and the pair may drop to the 1.0400 level. In case the pair breaks above the bearish trendline, then it could go and visit the 1.0700 level, which is possible to act as a resistance, but at the moment the bearish momentum is still in place.

The USD/JPY tries to reverse its trend

The USD/JPY has been in a well-defined bearish channel, but during the past two days it has been rising until reaching the upper trendline of the channel. It is possible for the pair to try to change its trend to the upside, but in order for the trend reversal to take place it would have to first break above the 55 day EMA (purple line), the upper trendline, and the 114.00 level. At the moment, those factors have been holding the price back, but a break out of that zone could accelerate the bullish momentum on the pair all the way towards the 116.00 level. Anyways, for that to happen the Dollar would have to continue gaining strength and the Yen would have to be pressured by a rise in risk appetite. To the downside, the 112.00 level could act once again as a support, but the 200 day EMA (blue line), could act as a better support.

Daily doji on the USD/CAD

The USD/CAD has made a good bearish bounce from the 200 day EMA and the 1.3200 zone towards the 1.3100 level. Once it got to the 1.3100 level, the pair bounces to the upside, but it does not gain enough bullish momentum and forms a “doji” on the last daily candle. The doji formation is an indecision Japanese candlestick pattern, which indicates exhaustion and uncertainty. From this point on, the USD/CAD could head in any direction, but due to the fact that the previous candle to the doji is a bearish candle, the price could try to head higher. However, the 1.3200 level along with the 200 day EMA could act once again as resistance. Above the 1.3200 level, its next resistance could be the 1.3300 level and below the 1.3100 level, its next support could be the 1.3000 level.

Descending triangle on the USD/JPY

The USD/JPY has found a good support zone around the 112.00 level and even though it has broken that level momentarily, it has not been able to continue falling from there. The highs of the daily candles have been lower than the previous ones, forming a descending triangle. On the descending triangle formation, the pressure accumulates to the downside, raising the probabilities of a bearish breakdown. To the downside, the 200 day EMA (blue line) around the 110.38 level could act as a support. Below the 200 day EMA, the 109.00 level could also act as support. If the price breaks to the upside, above the triangle, then the 114.00 level could act as resistance. The 55 day EMA (purple line) is changing its direction to the downside, indicating a possible bearish trend reversal.

WTI oil plummets

According to the US oil inventories, the production of oil in the North American country has been rising, causing the price of WTI oil to drop from the resistance zone at the 54.00 level and dropping below the 52.00 level. Right now the price of crude is finding some support at the 55 day EMA (purple line), but if it confirms a breakdown below that zone, oil could try to reach the 50.00 level. Below the 50.00 level, its next support level could be the 200 day EMA (blue line), around the 48.41 level. In case the price goes back up, it would be entering the congestion area between the 52.00 level and the 54.00 level where it has been since the beginning of December. From that consolidation zone the price has no clear trend.

The Pound is stuck at the 55 EMA

The GBP/USD has come back to the 55 day EMA and stays stuck at that level, around the 1.2437 zone. The 55 day EMA is acting once again as a support for the pair, but a breakdown of that zone could accelerate the drop towards the 1.2300 level. The more the price tests a support or resistance, the faster it accelerates in direction of the breakout. In the case of the GBP/USD daily chart we can see that the price has already tested the 55 day EMA three times; therefore, the drop could be significant in case it breaks below it. To the downside, below the 1.2300 level, the next support levels could be any of the round number zones like the 1.2200, the 1.2100, or the 1.2000. In case the pair bounces to the upside from the 55 day EMA, it may try to go and visit the 1.2600 level, but it has to confirm breakout of that zona in order for the GBP/USD to go back to its bullish trend. Above the 1.2600 level, its next resistance could be the 1.2800 level.

The USD/CAD comes back to the 1.3000 level

The USD/CAD on the daily chart has already touched three times the 1.3000 level during this week, but it has not been able to confirm a breakdown below that level. The highs of the daily candles have been lower than the previous ones, showing us that the downward pressure is accumulating around that zone. If oil keeps rising during the next week, then the USD/CAD may break below the 1.3000 level due to the correlation between oil and the Looney. Below the 1.3000 level, its next support could be the 1.2900 level. To the upside, the 1.3100 level may act as resistance, followed by the 1.3200 zone where we can find the 200 day EMA. However, the bearish trend is still in place for the USD/CAD and the pair may continue falling.

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Hammer formation on the GBP/JPY

The hammer formation is a Japanese candlestick bullish reversal pattern. The pattern is formed when the price has been falling, but it gets to a level from where it goes back up during the same session of the candlestick and leaves a relatively long lower shadow to close almost at the same level where it opened. The color of the candlestick is irrelevant, what it really matters is that the price has closed almost at the opening level at the end of the session. The long lower shadow is telling us that the buyers have taken control of the market. If the following candle is bullish, then that confirms the pattern and the price may continue heading higher as we can see on the daily chart of the GB/JPY. We can see on the chart that if the price continues heading higher, then it may find some resistance around the 145.41 level. To the downside, the 143.00 level may act as a temporary support, but the low of the hammer candle at the 140.44 level may act as a better support.