The GBP/USD continues rallying

The rally on the GBP/USD continues and it is getting closer to the 1.3000 level as shown on the daily chart. However, we must keep in mind that on the 1.3000 level we also have the 55 week EMA, which may contribute to making that zone a good resistance area from where the price may bounce to the downside. The bullish trend is gaining strength as shown by the angle of inclination of the 55 day EMA (purple line). There is a high probability of seeing a visit of the GBP/USD to the 1.3000 level during next week, but we must also be attentive to a bearish bounce from that level, because it could give us an opportunity to open a position. On the other hand, if the pair breaks above the 1.3000 level, then it may try to go and visit the 1.3100 zone. To the downside, in case of a bearish pullback, the most relevant support levels are the 1.2800 zone and the 1.2700 zone.

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The GBP/USD on resistance zone

The GBP/USD rises to the 1.2900 zone, but it has not been able to confirm a breakout above that level as we can see on the daily chart. Even so, the bullish trend is still in place and the pair may try to break above the 1.2900 level to go and visit the 1.3000 level. The 1.3000 level has a great chance of acting as a resistance, due to the fact that exactly at that level we can find the 200 week EMA, which may contribute to causing the price to bounce to the downside from there. Over the daily chart we can see that the 55 day EMA (purple line) is pointing to the upside, indicating that the bullish trend is gaining strength. If the 55 day EMA crosses above the 200 day EMA (blue line), then we will have a golden cross, which is a pattern that has bullish implications in the midterm. To the downside, in case of a bearish pullback, the main support zones are the 1.2800 level and the 1.2700 level where we can find the 200 day EMA.

Cotton at an important resistance zone

Cotton has been in a very sustainable bullish trend since the beginning of last year as we can see on the weekly chart of the July contract. The 55 week EMA (purple line) has crossed above the 200 week EMA (blue line), confirming a golden cross, which has bullish implications in the longer term. Therefore, the price of cotton may continue higher, even though it may try to stall at the 80.00 level, which could act as resistance. The current weekly candle has the shape of a “hammer” with a long lower shadow, which is showing us that the bulls have taken control of the market and may try to take the price higher, maybe above the 80.00 level. If the price breaks above the 80.00 level, then its next resistance may be the 85.00 level. In case the price of cotton retraces to the downside, then the 73.29 level may act as support, followed by the 200 week EMA at the 69.00 level.

Bullish flag on the GBP/USD

The GBP/USD has lost its bullish momentum during that last few sessions and it is currently consolidating around the 1.2800 zone, forming what it appears to be a bullish flag or a pennant as shown on the daily chart. From this point on, the pair may head in any direction, but there is a higher probability of seeing a bullish breakout since the trend coming into the formation is bullish. The 55 day EMA (purple line) has changed its direction to the upside, confirming a bullish trend. The GBP/USD would need to break above the 1.2900 level to keep its bullish trend, but the 1.3000 level could act as a resistance along with the 55 week EMA which is currently exactly at that level. To the downside, the nearest support area is the 1.2700 zone along with the 200 day EMA (blue line), but a much relevant support could be the 1.2600 level.

The EUR/USD retraces but keeps its bullish trend

The EUR/USD has made a very good bearish retracement from the 200 day EMA around the 1.0770 level, which has taken it below the 1.0700 level. None the less, the MACD indicator over the daily chart is showing us that the bullish trend is still in place. If the pair continues falling, then it may reach the 1.0600 level, which has acted as a support in the past. Below the 1.0600 level, its next support could be the 1.0500 level, a very psychological zone where the pair has had difficulties in continuing lower. However, the Euro is very sensitive at the moment over the French presidential elections and it could show high volatility depending on the outcome of the voting. In the best case scenario for the Euro, it may even break above the 1.1200 level in the mid-term. In the worst case scenario, it may break below parity at the 1.0000 level. To the upside, the 1.0800 level may act as a resistance, but above that level, the most important resistance is the high that it made around the 1.0900 zone.

Amazing drop on the WTI oil

WTI oil has been retracing to the downside from the 54.00 zone as shown on the daily chart and accelerates its bearish momentum once it broke below the 52.00 level. The drop on oil comes with a slowdown in the demand of crude, according to the latest US data. The drop has taken the commodity very close to the 50.00 level, which together with the 200 day EMA (blue line) at the 49.64 level could act as support. Below the 200 day EMA, the next support is on the 47.00 level where it made its most recent low. To the upside, the next resistances could come at the 52.00 level, the 53.00 level or the most important resistance at the 54.00 level.

The EUR/USD bounces from the 200 day EMA

The EUR/USD has a good rally that took the pair to the 200 day EMA round the 1.0770 level and which gave a trend reversal signal on the MACD over the daily chart. The rally was caused in part to the weak fundamental data out of the US and the rally on the Pound which at the same time helped to push the Single Currency higher. From the 200 day EMA the pair bounce to the downside and comes close to the 1.0700 level. In case the EUR/USD breaks below the 1.0700 level, it will have the road clear to drop to the 1.0600 level, a zone that has acted as a good support in the past. Above the 200 day EMA, its closest resistance is the 1.0800 level, but a break out above the 1.0800 level could take the price to the high at the 1.0900 level.

The Dollar Index stalls its drop

The Dollar Index has suffered a great drop after the US fundamental data came out worse than expected and after the enthusiasm over the economic stimulus that Donald Trump has been promising dissipated. The drop on the Greenback exacerbated even more when the Pound started rallying after the UK’s prime minister said that she was going to call for general elections in June. On the daily chart of the Dollar Index we can see that once the index came to the 200 day EMA (blue line) around the 99.36 level, it stalled there and it is currently trying to pull back up from there. But in order for the index to go back to its bullish trend, it must break above the high that it made around the 101.25 level. To the downside, in case the index breaks below the 200 day EMA, its next support area could be the low that it made around the 98.66 level.

Gold retraces while the Dollar gains ground

Gold and the Dollar normally have a negative correlation due to the fact that gold is quoted in US Dollars in the international markets and when the Dollar rises, the demand for gold falls causing its price to drop as well. The recent drop on the Dollar and the rise in risk aversion has kept the precious metal in an uptrend until it reached a high around the 1295 level, very close to the 1300 level. Today, US Treasury Secretary, Steven Mnuchin has said that in the long term the strength of the US Dollar is a good thing due to its role as a global reserve currency. This has caused the Greenback to rally while gold retraces to the downside. On the daily chart of gold we can see that below today’s low at the 1284 level, its next support could be the 200 week EMA around the 1256 level. To the upside, in case the price of gold breaks above the 1300 level, it will practically have the road clear all the way to the high that it made around the 1336 level.

WTI oil retraces, but keeps its bullish trend

WTI oil has had a very good bullish trend from the 47.00 level as shown on the daily chart. Oil has been benefiting from recent events, like the production cuts from OPEC and the geopolitical tensions in the Middle East. As tensions rise in Syria, it is possible that production and distribution on oil from the region may be disrupted. The rise in WTI oil has taken the price near to the 54.00 level, but during the last few sessions it has started retracing to the downside. However, regardless of the retracement, the bullish trend is still in place. If the price breaks below the 53.00 level, then the 52.00 may act as support. In case the price goes back up above the 53.00 level, then the WTI oil may try to reach the 54.00 level. 

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“Death Cross” on the EUR/JPY

The death cross is formed when the 55 day EMA (purple line) crosses below the 200 day EMA (blue line). It is called the death cross, because it has bearish implications for the instrument in the mid-term. The cross is not considered an entry signal, because normally when the cross is confirmed, the instrument is already over-extended to the downside and ready for a possible bullish pullback or retracement. None the less, the cross lets traders know that the bearish trend may continue in the mid-term, regardless if there is a pullback or not. On the daily chart of the EUR/JPY we can see that a death cross has been confirmed and we may see a breakdown of the 116.00 level. The pair may try to reach the 115.00 level, especially if the risk aversion in the markets continues and the Yen keeps rallying versus its main counterparts. But if the pair bounces to the upside, then its first resistance zone may be the 117.00 level, followed by the 118.00 level or the 119.00 level.

The EUR/JPY plummets amid a rise in political risk

The Yen has been gaining a lot of strength versus its main counterparts, but especially versus the Euro as the political risks in Europe keep mounting. The possibility that the French elections could be won by one of the candidates against the European Union has kept the financial markets in Europe on their toes. On top of that, there were some explosions today in Germany just before one of the soccer games of the Champions League. The EUR/JPY breaks below the 117.00 level and it drops very close to the 116.00 level. The 116.00 level may act as a support, but if the political risks keep mounting, then the pair may break below that level. The 55 day EMA (purple line) is about to cross below the 200 day EMA (blue line) and if such cross occurs, then a “death cross” will be confirm, which is a pattern with bearish implications for the pair in the middle term. To the upside, the first resistance level may be the 117.00 zone, followed by the 118.00 level.

WTI oil breaks above the 53.00 level

WTI oil breaks above the 53.00 level and goes back to the congestion area that it created at the beginning of the year between the 52.00 level and the 54.00 level. The rally on WTI oil has been really spectacular from the 47.00 level, but it has been caused mostly by the geopolitical tensions surrounding the production and distribution of crude in the Middle East. On the daily chart we can see that the price of oil may continue heading higher, maybe trying to visit the 54.00 level. But if the bullish trend is to be kept in the mid-term, then WTI oil must break above its latest high around the 55.20 level. Due to the fact that the commodity is clearly over-extended to the upside, it may try to pull back down and visit the 52.00 level, which could act as support. Below the 52.00 level, the 55 day EMA (purple line) around the 51.10 level may also act as support, followed by the 50.00 round number level.

Possible trend reversal on the GBP/USD

The GBP/USD has been consolidating during the past couple of weeks and it has formed a symmetrical triangle on the daily chart, around the 1.2500 level. Today the Pound weakened amid the disappointing fundamentals out of the UK and the rally on the Dollar. The Dollar strengthen today despite the lower than expected reading on Non-Farm Payrolls, because the unemployment rate dropped from 4.7% to 4.5% and according to some analysts, that is a sign that the US is approaching full employment.  The drop on the GBP/USD causes the pair to break below the symmetrical triangle and below the 1.2400 level. According to the MACD indicator, the pair has apparently changed its trend to the downside on the daily chart. Therefore, the GBP/USD may try to visit the 1.2300 level. If the pair breaks below the 1.2300 level, then is will actually have the road clear to go and visit its latest low at the 1.2110 level. To the upside, the most relevant resistance is the 1.2700 zone where we can also find the 200 day EMA (blue line).

Will de Dow Jones go back up?

The Dow Jones industrial index reached an all-time high on March 1^st around the 21166 points and since reaching that level, the index started retracing back down. The doubts about the implementation of the economic stimulus that President Donald Trump has promised have been pressuring the US stock markets to the downside. One week after reaching its all-time high, the MACD indicator on the daily chart of the Dow Jones confirmed a bearish trend reversal. The index continued falling until it reached the 20475 point zone where we can find the 55 day EMA (purple line), which is currently acting as a support. Actually, the Dow Jones has consolidated just above the 55 day EMA and is heading sideways. The bars on the MACD’s histogram are getting smaller than the previous ones, showing us that the bearish trend is losing its strength. Therefore, the index may try to bounce back up, but on the other hand, if the index manages to break below the 20475 point level, then the bearish momentum may accelerate even more and the Dow Jones will practically have the road clear to reach the 20000 point area.

USD/JPY: Tries to go back down

The USD/JPY has tried to go back down and maybe visit the 110.00 level, as shown on the daily chart, and which could act as a support. In case the USD/JPY bounces to the upside from the 110.00 zone, then it could be forming a double bottom pattern. But in order for the double pattern to confirm itself, the pair must break above the 112.00 level. Before breaking the 112.00 level, the pair may find some obstacles to overcome like the 111.00 level and the 200 day EMA (blue line). Above the 112.00 level, the 55 day EMA (purple line) may act as a resistance, but a more relevant resistance could be the 114.00 level.

GBP/USD: Without a clear direction

The GBP/USD tries to go back up towards the 1.2500 level as shown on the daily chart, but in reality the pair has no clear direction and it is consolidating with the 55 day EMA (purple line) acting as a very good support zone. The intraday volatility has been high, but there is no clear trend on the GBP/USD. If the price breaks to the upside, then the 1.2600 level may act as a resistance as it did in the past. Above the 1.2600 level, the next resistance could be the 1.2700 zone, where we can also find the 200 day EMA (blue line) and which can contribute to making that zone a good resistance area. Below the 1.2400 level, the support levels could be any of the round number zones like the 1.2300, 1.2200, or 1.2100 levels.

EUR/USD: The consolidation continues

The EUR/USD has been consolidating during this week just below the 1.0700 level as shown on the daily chart. The MACD indicator is showing us that the bearish trend is still in place, but it is losing its strength, according to the bars on the histogram. From the current levels, the EUR/USD may head in any direction. If the pair breaks below the 1.0600 level, then its next support area could be the 1.0500 zone, which has been a congestion area in the past. Above the 1.0700 level, its next resistance could be the 1.0800 zone, where we can find the 200 day EMA (blue line) and from where the price may bounce to the downside. Above the 1.0800 level, the most important resistance zone is at the 1.0900 level from where the pair made a sharp move to the downside.