Will silver come out of consolidation?

Silver completed 36 consecutive sessions oscillating around the 17.00 level, round number level that coincides with the 200 day exponential moving average. When the price of an asset consolidates during a long period of time around a zone or a level, it is because the traders and investors are complacent with the actual price and there are no underlying reasons or fundamentals for the price to move. During the last two trading sessions the price of silver has broken to the downside as shown on the daily chart and comes near the 16.29 level, which has acted as support in the past, but the 16.00 level could act as a better support level for the commodity. To the upside, the 17.45 zone could act as resistance, followed by the 18.19 level. Until the price of silver breaks below the 16.00 level or above the 18.19 level we do not have a clear direction, even though the price of silver has been in a much larger consolidation zone since the beginning of 2016.

Strong rally on the Pound

The GBP/USD has been supported by the latest developments around the Brexit negotiations. During the last few days the volatility on the pair has increased greatly, taking the price to a low around the 55 day EMA (purple line) around the 1.3200 zone. From there the GBP/USD bounces rapidly to the upside as the news about a potential soft Brexit hit the wires. The rally on the GBP/USD has taken the pair to a high around the 1.3447 level, but the price currently settles around the 1.3411 zone. The bullish momentum is still in place and the pair may try to visit the 1.3500 level, but in order for the bullish trend to come back in the midterm, the price must break above the peaks at the 1.3600 zone. To the downside, the most relevant support level is at the 1.3300 level, zone that was resistance and could change to support.

Rally on the USD/CAD

The USD/CAD has been respecting the technical levels very well as shown on the daily chart. First, the pair tries to break above the 200 day EMA (blue line), but pulls back down to the 1.2674 level from where it bounce back up. On the second visit to the 200 day EMA, the USD/CAD finds again resistance and goes back down to the 1.2674 level, where we can find on the second occasion the 55 day EMA (purple line). During the last two trading sessions, the USD/CAD has come again to the 200 day EMA and it is trying to stall there. In case the pair breaks above the 1.2800 and the 200 day EMA, then the bullish momentum may accelerate and the price may reach the 1.3000 level. To the downside, the closest support is at the 1.2674 level, followed by the 1.2600.

Has the Euro lost its momentum?

The Euro versus the Dollar has been gaining some ground since it made a low at the 1.1600 zone as shown on the daily chart. Around the 1.1800 level the pair made some interesting moves. Initially, when it tried to break above the 1.1800 level, there was a shooting star pattern, which helped push the price lower towards the 55 day EMA. At the 55 day EMA, the price of the EUR/USD bounced to the upside and made a new high above the 1.1900 level. The stochastics indicator is also making higher highs, but it has entered the overbought zone, therefore we could see a bearish pullback or profit taking on the EUR/USD. To the downside, the most relevant supports are at the 1.1800, 1.1700 and 1.1600 levels. To the upside, the most important resistances are the 1.2000 level followed by the 1.2100 level.

Will copper go back to its bullish trend?

Even though the markets in China have been pulling back a little bit, copper tries to go back to its bullish trend. Copper and the Chinese economy have a positive correlation due to the fact that China is the largest consumer of copper in the world. On the daily chart of copper we can see that during its latest drop, the price came to the 307.00 level where we can find the 55 day EMA and from where it bounces to the upside. During this week, the price of copper has been gaining some ground and breaks above the bearish trendline. Copper may be trying to change its direction to the upside. The stochastics indicator also breaks above its bearish trendline but accelerates too rapidly to the overbought zone on the 80% level. Therefore, the price of copper may try to correct to the downside. On the other hand, if the price continues to rise, its closest resistance is at the 325.86 level, but a more important resistance is at the 330.66 level where we can find the 200 month exponential moving average.

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Strong drop on the USD/JPY

The US Dollar has been losing ground versus its main counterparts during today’s session, especially versus the Yen and the Swiss Franc after the disappointing durable goods orders out of the United States. The core durable goods reading came out surprisingly lower than expected for the month of October, after being on the upside during three months in a row. On the daily chart of the USD/JPY we can see that the price has broken below its 200 day EMA (blue line), around the 111.77 level to drop to the 111.55 level. From this point on, the USD/JPY has practically the road clear to drop all the way to the low at the 109.54 level, but it could have some minor pullbacks on its way down. The same 200 day EMA may become now resistance, but the 55 day EMA (purple line) or the 113.00 level are still its most relevant resistance zone.

The USD/JPY is trapped in between EMAs

The exponential moving averages or EMA could act like good support or resistance zones, especially the ones that are slower like the 200 period or 55 period EMAs. On the daily chart of the USD/JPY we can see that the pair had a good bullish trend until it decided to break below the 55 day EMA (purple line) and came very close to the 200 day EMA (blue line). When this type of price action occurs, normally the price of the asset goes back to the 55 day EMA like it did on the USD/JPY during the last two trading sessions. The price is currently boxed between those two moving averages and it could stay there for a while without taking a clear direction. In order for the bullish trend to come back, the price must break above the 113.00 level. To the downside, a break down below the 111.64 level could clear the road for the pair to drop to the 109.54 level.

False breakout on gold

A false breakout is when the price of an asset manages to break above an important resistance level or below an important support level, but the momentum is lost and the price cannot continue further, only to fall right back to the consolidation area where it was before. On the daily chart of gold we can see that the commodity was consolidating during the last 22 sessions in between the 200 day EMA (blue line) and the 55 day EMA (purple line). During yesterday’s session, the precious metal broke above the 55 day EMA and came close to the 1300 level without touching it. The bullish momentum was not enough and today the price drops below the 55 day EMA and enters the congestion area where it was before. From this point on the price may head in any direction. Above the 55 day EMA at the 1283 level, its next resistance is still the 1300 level. Below the 200 day EMA at the 1268 level, its next support level could be the 1200 zone.

Will gold keep its bullish momentum?

Gold has finally broken out of the consolidation where it was stuck, but will it ultimately break above the 1300 level? God has been consolidating during the last 22 sessions between the 55 day EMA (purple line) and the 200 day EMA (blue line). During this Friday’s session, the price managed to break above its 55 day EMA at the 1283 level. The price of gold comes close to the 1300 level, but that zone may act as resistance. Gold still has not broken above the 1300 level. A breakout above the 1300 level will clear the road for gold to reach the peak at the 1357 level. To the downside, its most relevant support is the 200 day EMA at the 1268 level, due to the fact that the price has already bounced to the upside on several occasions from that moving average. 

The USD/CAD comes near the 200 day EMA

The USD/CAD ties to go back to its midterm bullish trend after having retraced to the downside as shown on the daily chart. The pair managed to drop below the 200 day EMA (blue line), but it did not reach the 55 day EMA (purple line). The USD/CAD has been in a good bullish trend from the low that it made at the 1.2060 level, even though oil has been rallying and it should have supported the Canadian Dollar. Normally, the 200 period EMA acts as a good support or resistance zone and that is why if the USD/CAD reaches that moving average, it may try to bounce to the downside from there. However, the USD/CAD may also try to break above the 200 day EMA and maybe go and visit the 1.3000 level which could act as resistance.

The EUR/USD breaks above the channel

The EUR/USD was in a well-defined bearish channel as shown on the daily chart, but yesterday the pair rallied above the upper trend line of the channel to break today above the 1.1800 level. Despite the strong rally, the EUR/USD losses its momentum and drops back during today´s session to form what it appears to be a shooting star pattern on the daily candle. The shooting star pattern is a bearish reversal pattern and if tomorrow’s candle is bearish, the formation will be confirmed. On the other hand, the 1.1700 level may act as support, but if the price breaks below the 1.1700 level, then the pair will be entering again the bearish channel with some supports at the 1.1600 level or the 1.1500 level where we can find the 200 day EMA. To the upside, its next resistance level could be the 1.1900 level.

Euro rises after the German data

The Euro gains a strong bullish momentum versus its major counterparts after the German data showed that its economic growth was higher than the United States’ during the third quarter. The data supports a possible monetary policy change by the European Central Bank and that is why the Euro rises. On the daily chart of the EUR/JPY we can see a strong bullish momentum that took the pair above the 133.00 level and reaches a high at the 133.82. The 134.00 level could act as a resistance along with the highs at the 134.47 level, but in order for the pair to go back to its bullish trend in the long term, the price must break above the 134.47 level. Regardless of the strong rally, the EUR/JPY may try to pull back, in case of a bearish retracement, the pair may find some support at the 133.00 level. Below the 133.00 level we can see some interesting supports at the 132.00 level where we can find the 55 day EMA followed by the low of the range at the 131.37 level.

Will the Kiwi go back to its bearish trend?

The Kiwi or the NZD/USD was retracing to the upside from the 0.6800 zone as the probabilities of a rate hike by the Reserve Bank of New Zealand got higher amid a warning about rising inflation. However, once the pair got close to the 0.7000 level, the stochastics indicator visited the overbought level at the 80% zone and bounced to the downside at the same time that the price of the NZD/USD came back to the 0.6900 level. Since October 24^th, the 55 day EMA crossed below the 200 day EMA, forming what we know as a “death cross”, which has bearish implications in the midterm. Therefore, it is not unlikely to see the pair go back to its bearish trend, but at the same time the 0.6900 level may act as support. Additionally, in order for the NZD/USD to go back to its bearish trend, the price must break below the 0.6800 level.

Copper stays at support

Copper has found a good support zone at the 307.00 level where we can find the 55 day EMA as shown on the daily chart. Copper has already bounced from the 55 day EMA to the upside and even though it has been retracing to the downside during the last few weeks, the bullish trend is still in place in the midterm. Therefore, it is possible for the commodity to bounce to the upside from the 307.00 level. In case of a bullish bounce, its closest resistance is at the 318.38 level, followed by the peak that it made at the 325.86 level. In order for copper to go back to its bullish trend, it should break above the 325.86 level. In case of a bearish breakdown below the 55 day EMA, copper would practically have the road clear to fall to the low that it made at the 289.31 level.

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Copper may have found some support

Copper was rallying on the back of great fundamentals out of China, which is one of the biggest consumer of the industrial metal. The bearish pullback on copper around the middle of September was stalled by the 55 day EMA from where the price of copper bounces to the upside. The commodity rallies to the 325.86 level from where it bounces to the downside. The most recent pullback on copper has taken the price to the 307.00 level, which is trying to act as a support. The 317.84 has acted again as a resistance, but copper falls back to the 307.00 level and the 55 day EMA. The price of copper may have found a support at the 55 day EMA as it did in September and it could bounce back to the upside. In case of a bullish bounce, the 317.84 level could act as a resistance, and in order to keep its bullish trend it must break above the 325.86 level.

Extreme consolidation on gold

On many occasions the financial assets could enter into a well-defined range in a consolidation that could last a prolonged period of time like in gold. On the daily chart of gold we can see that the price of the precious metal has been consolidated between the 200 day EMA as support around the 1267 level and the 55 day EMA as resistance around the 1283 level during the last 10 sessions. Inside such range, we could try to trade by buying at the support of the 200 day EMA or selling at the resistance of the 55 day EMA, however we could risk having the price take off in any direction and leaving us on the wrong side of the trade. If there is a bullish breakout, then its closest resistance is at the 1300 level, but a breakout above the 1300 level could take the price to the peak at the 1357 level. To the downside, a bearish breakdown of the 200 day EMA would open the road for the price to drop all the way to the 1204 level or the 1200 level with some minor pullbacks on the way down. 

The Euro could not break support

The Euro versus the Dollar continues finding some good support at the 1.1600 level without being able to break it to the downside, at the same time, the pair has not been able to bounce to the upside. On the daily chart we can see that the pair has tested the 1.1600 level on several occasions and as the EUR/USD touches more times the 1.1600 level, the probabilities of seeing a bearish break down rise. If the pair breaks to the downside, then its next support could be the 1.1500 where we can find the 200 day EMA. To the upside, the 1.1689 level has been a good support in the past and now is acting as a resistance. If the EUR/USD breaks above the 1.1689 level, its next resistance level could be the 1.1800 level. 

The Dollar at a key resistance

The Dollar index has reached a very good resistance at the 95.00 level and it has not been able to break that level to the upside as shown on the daily chart. The Dollar gained strength this Friday versus most of its counterparts as the NFP numbers came out somehow mixed. While the number of new jobs created came out lower than expected, the US unemployment level came down from 4.2% to 4.1%. The Dollar has been very volatile, but it has not taken a clear direction. Above the 95.00 level, its next resistance could be the 95.50 level, but the 96.00 level could also act as a resistance. To the downside, the 94.00 level is its closest support along with the 55 day EMA. The 93.00 level could act as a more relevant support on the index.

The Pound falls after the Bank of England’s rate decision

The Bank of England has risen its interest rates from 0.25% to 0.50% for the first time since 2007 when the financial crisis started. Even though the rate hike should have supported the Pound, the GBP/USD falls more than 200 pips from the 1.3300 zone to below the 1.3100 level as shown on the daily chart. The drop on the Pound is due to the fact that the Bank of England used a dovish language and said that the next rate hikes will be gradual. Additionally, it looks like the market had already priced in the current rate hike and the GBP/USD had no space to rally further. At the moment, the pair keeps its bearish momentum and it may possibly visit the 200 day EMA, around the 1.3000 zone where it could find some support. Below the 1.3000 level, its most relevant support is at the 1.2800 level. Above the 1.3100 level, the pair would be going back into the congestion area where it may consolidate for a longer period of time.

The bullish momentum on oil could accelerate

WTI oil has had a very good bullish momentum amid the continuation of production cuts of crude and the possibility of a rise in demand from China as the Chinese economy keeps expanding. WTI oil reaches a high around the 55.00 zone, level that was last touched on January 1^st of this year. If the price manages to break above the 55.00 level, then WTI oil would be entering a new bullish trend in the midterm. The MACD indicator is showing us that the bullish trend is gaining strength, therefore a bullish continuation of WTI oil is possible. If the price retraces to the downside for whatever reason, then its closest support level is at the 52.00 zone, followed by the 50.00 zone. The 55 day EMA and the 200 day EMA could also act as support.