The NZD/USD completes 7 weeks rallying

The New Zealand Dollar versus the US Dollar has completed seven weeks rallying and it stays above the 0.7300 key level, even though it has not been able to confirm a real breakout of the bearish channel shown on the weekly chart. On the chart we can also see that the pair has found a good resistance on the 200 week exponential moving average (blue line) every time it visits that zone. On the last visits that we have seen to the 200 week EMA, the pair has left some relatively short wicks above the moving average to come back into the channel. During the last two weeks, the NZD/USD has stayed above the 200 week EMA, but there is still the possibility of coming back down. None the less, if the next weekly candle is also bullish, a breakout of the 200 week EMA, the 0.7300 level, and the channel could be confirming to the upside and the pair may visit the 0.7400 level. Above the 0.7400 level, its next resistance could be the 0.7500 level. In case of a bearish bounce or pullback, the 0.7200 level or the 0.7100 level could act as support.

Possible shooting star on oil

Since WTI oil started retracing to the upside from the 42.00 level, we have been attentive to a possible bearish bounce from the 44.00, because the 44.00 level had acted in the past as support and it was possible for it to act as resistance on this occasion. But the bullish momentum was very strong on WTI oil and the price continued rallying towards the 45.00 zone. At the 45.00 zone today’s daily candle has the shape of a shooting star. The shooting star formation is a bearish reversal pattern that it is confirmed when the next candle is also bearish. Therefore, oil may drop from the current level. To the downside, the 44.00, the 43.00 or the 42.00 levels may act as support. To the upside, the 46.00 level, the 47.00, or the 48.00 may act as resistance.

The Dollar Index breaks a key support level

The Dollar Index measures the strength of the Greenback versus its main counterparts with the Euro making up 57.6% of the index. That is why the recent rally on the Single Currency has taken the Dollar Index to new lows. The Dollar has also been pressured by the doubts that have risen lately over the capacity of Donald Trump implementing the economic stimulus that it promised for the United States. On the daily chart we can see that the index found a good support at the 96.00 level, but today the bearish momentum accelerates and the index breaks below the 96.00 level. If the drop continues, the instrument may reach the 95.00 level. Above the 96.00 level, the 97.00 may act as resistance, along with the 55 day exponential moving average (purple line), which is very close to the 98.00 level. The 200 day exponential moving average (blue line) at the 98.64 level could also act as a resistance.

The Euro takes off after comments by Mario Draghi

Traders and investors of the Forex market have been expecting some sign of the future monetary policies that the European Central Bank may put into place and today its president, Mario Draghi, has said that the Eurozone needs a moderate economic stimulus for now. Those words have been taken as a bullish sing for the Single Currency and we can see how on the daily chart the EUR/USD has broken above the 1.1300 level. The pair breaks out of the consolidation zone where it has been during the past few weeks and if tomorrow’s daily candles is also bullish, then the EUR/USD may try to reach the 1.1400 level. On the other hand, if the pair drops below the 1.1300 level, then it will be entering the congestion zone between the 1.1100 level and the 1.1300 level with the 1.1200 level as its midpoint. To the downside, the 1.1100 level and the 1.1000 level along with the 200 day exponential moving average on the 1.0920 level could act as support in case of a bearish retracement, but for now the bullish trend is still in place.

Pullback on oil could be temporary

WTI Oil is continuing pulling back to the upside since it bounced from the 42.00 level to reach the 43.42 zone at the moment. It is possible for oil to continue rallying maybe towards the 44.00 level, but there is a good chance for that level to act as resistance, due to the fact that on May 5^th, it acted as a support as shown on the daily chart. We should remember that usually support become resistance or resistance becomes support. The bearish trend is still in place, even though the price of oil has been rising during the last three trading sessions. Never the less, if the bearish trend is to continue, the price must break below the 42.00 level and maybe go and visit the 41.00 level. Above the 44.00 level, the next resistance could be the zone between the 46.00 level and the 47.00 level. But a better resistance level could be found at the 200 day exponential moving average (blue line), which is currently around the 48.68 level.

Will silver visit the 17.00 level?

The price of silver has been rallying during the last three days as shown on the daily chart, since it made a low at the 16.34 level. The rally on silver coincides with the comeback that gold has been making lately. Those two precious metals, gold and silver, have a positive correlation. However, we must keep in mind that the bearish term in the short term is still in place and silver may try to go back down. In case of silver going back down, the low at the 16.34 level may act once again as support, but a more relevant support could be the 16.00 round number level where it made its latest low to start climbing. To the upside, the 17.00 level may act as resistance, but we are still waiting to see if the price of silver does get there during next week’s trading sessions. Above the 17.00 level, its next important resistance is at the 200 day EMA on the 17.30 level, followed by the high that it made on the 17.74 level.

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The drop continues on oil

WTI oil continues dropping and that has pushed the US Dollar even higher, especially against emerging markets currencies. The price of WTI oil has reached a low at the 42.00 round number level and it stalls momentarily at that zone, but it may continue dropping. The next support on oil could be the 41.00 level. To the upside, we can see on the daily chart that any of the round number levels like the 44.00, the 46.00, the 47.00 or the 48.00 could act as resistance, but a more relevant resistance could be the 200 day EMA, blue line, around the 48.83 level. On the other hand, we can see on this same chart that the commodity is overextended to the downside and it could be getting ready for a more pronounced bullish correction.

Good reversal on the USD/CAD

The USD/CAD continues pulling back as oil continues dropping. There is a negative correlation between the USD/CAD and oil, which is why the pair is rallying during the past few days. The Looney may try to reach the 200 day EMA, blue line, around the 1.3356 zone and maybe complete a pattern known as a breakout and pullback formation. From the 200 day EMA zone, the pair may try to bounce back down and try to reach the latest low that we see on the daily chart around the 1.3162 level. But a breakout above the 200 day EMA, may take the pair to the 55 day EMA, purple line, which could act as resistance. Above the 55 day EMA, the 1.3500 zone may also act as resistance, especially when that zone has acted as a congestion area in the past.

Consolidation continues on the Kiwi

The NZD/USD or Kiwi continues consolidating in between the 0.7200 level and the 0.7300 level as shown on the daily chart. The consolidation has formed what it appears to be a symmetrical triangle from where the price may actually breakout in any direction. The 55 day EMA, purple line, has continued crossing above the 200 day EMA around the 0.7054 level, reaching the 0.7100 level. The crossing of the EMAs has confirmed a pattern known as the golden cross, which has bullish implications in the midterm. Therefore, even if the pair continues consolidating above the 0.7200 level, it may break the 0.7300 to continue moving higher. A breakout of the 0.7300 level may take the pair to the 0.7400 zone. A breakdown of the 0.7200 level may cause the pair to pull back to the 0.7100 level where the 55 day EMA may act as support.

Shooting star on the GBP/JPY?

The shooting star pattern is a bearish reversal formation and it is all the contrary of the hammer pattern. It is called a shooting star, because it leaves behind a long upper shadow with a small real body at the bottom, which resembles a shooting star or a comet. The pattern is bearish due to the fact that the long upper shadow is showing us that the price was at some point at a high level and then it comes back when the sellers or bears take control of the market. The small real body at the bottom is showing us that the price has closed very near to the level where it opened. The real body of the candle can be of any color, what is important is that the price has come back very close to the zone where it opened the session. When the shooting star pattern is formed around an important resistance level, it has more probabilities of confirming itself. In this case, we can see that on the daily chart the shooting star candle is at the 200 day exponential moving average (blue line) and if the next candle is bearish then that would mean that the bears are still in control of the market and the price of the GBP/JPY may drop. In case of a bearish bounce from the current level, the 139.00 level may act as a support. To the upside, the most important levels that could act as resistance are the 143.00 level, the 145.00 level, or the 148.00 level.

Symmetrical triangle on the GBP/USD 15 minute

On the 15 minute chart of the GBP/USD we can see the formation of a symmetrical triangle, which has created by the high volatility on the Pound during today’s session. The symmetrical triangle usually works as a continuation pattern, depending on the direction of the trend coming into the formation. In this case, the trend is bullish coming into the symmetrical triangle, therefore there is a higher probability that the price of the GBP/USD may break to the upside. However, we cannot bet the house on that assumption, since the price may actually break in any direction. The high volatility on the Pound was created by the decision of the Bank of England to leave the current interest rate at 0.25%, but at the same time it has hinted on a possible rate hike during the next meeting. That is why we saw that initially the GBP/USD rose, but then it retraced to the downside and finally consolidates around the 1.2757 zone to form the symmetrical triangle. In case of a bullish breakout, the GBP/USD may try to go and visit the 1.2800 level. In case of a bearish breakdown, the pair may try to visit the 1.2700 level. We must be very attentive, because we may get an entry opportunity on this pair, either to the upside or to the downside.

High volatility on the EUR/USD, but no clear direction

The EUR/USD was very volatile during today’s session amid the US fundamentals and the FED’s decision. First during the day, the inflation data out of the US came out lower than expected, causing the EUR/USD to rally to the 1.1300 zone, but after the FED decided to raise its interest rates by 25 basis points to place it at a 1.25%, the Dollar rallies against its major counterparts and the EUR/USD drops again to the 1.1200 zone where it has been consolidating lately. The last five daily candles of the EUR/USD have a relatively small real body, which is an indication of indecision. Therefore, the pair may head in any direction. Below the 1.1200 level, its next support is at the 1.1100 level. To the upside, the 1.1300 level continues being its most important resistance so far.

Gold comes back to its 200 week EMA

Gold has formed what it appears to be a double top pattern on the 1295 zone from where it has bounced to the downside. The precious metal did not have enough strength to reach the 1300 level and to break it to the upside. Lately, gold has been very volatile while the Dollar tries to regain some of its lost ground, but once it got to the 200 week exponential moving average which coincides with the 55 day exponential moving average (purple line) at the 1256 level, it stalls its bearish pullback there. From this point on, gold may try to bounce to the upside, but if it breaks that zone to the downside, then its next support could be the 200 day exponential moving average at the 1243 level. Below the 200 day EMA, the next support is at the low of the 1214 level, followed by the low at the 1200.00 round number level. A breakdown of the low at the 1214 level would be confirming the double top formation, since that zone is the neckline or confirmation line of the pattern. To the upside, the highs at the 1295 level continue being its most relevant resistance.

Good drop on the GBP/USD

The Pound has been very sensitive to what may happen with the Brexit negotiations after the recent general elections in the United Kingdom, where none of the main political parties has managed to secure a majority in Parliament. That is why we have seen a lot of volatility on the GBP/USD and today we saw a very good drop that took the pair to Friday’s low around the 1.2635 zone as shown on the daily chart. If the GBP/USD bounces from this zone to the upside, then a double bottom formation may develop. But if the pair continues falling, then the closest support zone could be the 1.2600 level, even though the 1.2500 or the 1.2400 levels could also act as supports in case that the bearish trend remains in the short term. If the GBP/USD breaks above the 1.2700 level, then the price may consolidate around that level and the 1.2800 level. In order for the pair to go back to its bullish trend, the price must break above the 1.3000 level.

Possible resistance on the USD/JPY

On the daily chart of the USD/JPY we can see that the pair made a good bullish retracement from the low that it touched at the 109.12 level on June 7^th, but once it got to the 110.32 level, it stalls its bullish momentum on that zone, which was a good support in the past and that now it could act as resistance. If the pair bounces to the downside from the 110.32 level, then it could be completing a breakout and pullback pattern, which could take the USD/JPY back to the 109.12 level. The 109.12 level could act as support, but in case it breaks that level to the downside, the next support level could be the 108,14 level. The stochastic indicator has come out of the oversold area very strongly and it could be indicating a bullish continuation of the price. If the pair continues rallying, then the 55 day exponential moving average (purple line) at the 111.2 level could act as resistance. Above the 55 day EMA, its next resistance could be the 113.00 level.

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The EUR/JPY is struggling with a support zone

The EUR/JPY is one of those trading instruments that behaves in a predictable manner around technical levels, like the round number areas. On the daily chart of the EUR/JPY we can see that the pair has found a very good support zone at the 123.00 level since the beginning of May. To the upside, there is a good resistance zone around the 125.80 level. During today’s session the pair has broken momentarily below the 123.00 level, but once it touched the 55 day exponential moving average (purple line), it bounces from the level to the upside and forms what it appears to be a spinning top or doji pattern. The spinning top or doji is an indecision candlestick pattern that could signal a bullish reversal if the next candle closes to the upside. In case of a bullish bounce, the pair may try to go and visit the resistance area at the 125.80 zone. Below the 123.00 level, its next support could be the 122.00, followed by the 200 day exponential moving average (blue line) at the 120.85 level.

The GBP/JPY keeps its bearish channel

The GBP/JPY has been retracing to the downside the rally that it made from the 135.58 level to the 148.09 level. The drop has not been in a straight line, but it has formed a very well defined bearish channel with some small pullbacks on the way down as we can see on the daily chart. Once the pair got to the 141.81 level, where we can find the 50% Fibonacci retracement and the 200 day exponential moving average (blue line), it consolidates around that zone for a while until it breaks to the downside. The yen has gained a lot of strength versus its main counterparts during today’s session as the risk aversion rises in the international financial markets. That is why we see that the bearish momentum accelerates during today’s session and the GBP/JPY breaks below the 200 day EMA to come very close to the 61.8% Fibo around the 140.00 level. The 140.00 level may act as support, but below that level, the 139.00 level along with the 76.4% Fibo may also act as support. Above the 200 day EMA and the 50% Fibo, its next resistance could be the 143.00 level.

Oil finds a good support at the 47.00 level

WTI oil has found a good support zone around the 47.00 level as shown on the daily chart. The 47.00 round number level coincides with the 61.8% Fibonacci retracement of the rally that it had from the 44.00 level to the 52.00 level. The combination of the 61.8% Fibo and the 47.00 level has made that zone a very strong support for WTI oil. The volatility on oil has risen lately after Qatar had some political differences with its neighbors like, Saudi Arabia, Egypt, Bahrain, and the United Araba Emirates. However, even with the current volatility, the price of WTI oil has not been able to break below the 47.00 level or above the 48.00 level. To the downside, below the 47.00 level, the next important support is at the 46.00 level, which coincides with the 76.4% Fibo, followed by the low at the 44.00 level. Above the 48.00 level, the next resistance could be at the 200 day EMA on the 49.41 level, followed by the 50.00 level.

Oil bounces from the 61.8% Fibo

Oil has had a very good bearish trend lately, due to the oversupply worries that are permeating the market. Once the price of WTI oil reached the 61.8% Fibonacci retracement at the 47.00 level, it bounces to the upside from that zone as shown on the daily chart. The 50% Fibo is exactly at the 48.00 level and it could act as a resistance, but the daily candle has closed as a “hammer”, which is a bullish reversal candlestick pattern if the next candle is bullish. Above the 48.00 level, the next resistance could be at the 200 day exponential moving average on the 49.41 level. The 50.00, 51.00, or the 52.00 levels could also act as resistance. Below the 47.00 level, the next support zone could be the 76.4% Fibo which is at the 46.00 level, followed by the 44.00 level. 

Silver nears its 61.8% Fibo

On the daily chart of silver we can see that the commodity has bounced to the upside from the 17.00 level and breaks above its 200 day exponential moving average (blue line) at the 17.37 level to come very near to the 61.8% Fibonacci retracement of the drop that it had from the 18.63 to the 16.00. The 61.8% Fibo is at the 17.64 level and it is possible for that zone to act as resistance. However, if the price of silver manages to break above the 61.8% Fibo, then it could go and visit the 76.4% Fibo which is very close to the 18.00 level. The 18.00 level along with the 76.4% Fibo has a higher probability of acting as a resistance. Below the 200 day EMA, the most important support is at the 17.00 round number level, followed by the 16.00 level.