Excellent rally on gold

On the daily chart of gold we can see that the price of the precious metal has rallied during today’s session to break above its 200 day and 55 day EMAs and reaches the 1274 zone. In case the price keeps rallying, its next resistance could be the 1300 level. Fundamentally, the drop on the US Dollar has supported the price of gold and also the 30% drop on Bitcoin has moved some capital towards gold. The price of gold may not rally in a straight line to the 1300 level, but it could make some pullbacks on the way up. To the downside, in case the price breaks below the 200 day EMA at the 1268 level, the bearish momentum may take gold to the low at the 1236 level, which could act as support. In reality, the price of gold may take any direction.

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The EUR/JPY at key resistance level

The EUR/JPY rallied during today’s session and broke a key resistance at the 134.479 level. The breakout has not been confirmed yet. On the weekly chart of the EUR/JPY we can see that the next candle should be above the 134.479 in order for the breakout to be confirmed. In case the rally continues on the EUR/JPY, then its next resistance level could be the 139.000 round number zone from where the price has already bounced to the downside in the past, but we must keep in mind that the pair has not visited that zone since July 2015. On the weekly chart we can also see a golden cross around the 126.371 level. The golden cross is completed when the 55 day EMA (purple line) crosses above the 200 day EMA (blue line). The golden cross has bullish implications in the midterm, therefore it is possible for the EUR/JPY to continue rallying.

The EUR/USD gains bullish strength

The EUR/USD has broken during today´s session above the 1.1800 level, but it still has to go and visit the 1.1900 level. Above the 1.1900 level, its next important resistance is at the 1.2000 zone. The MACD indicator over the daily chart is showing us a possible bullish trend change. If the MACD line (green line) crosses above its signal line (red line), then we could see a visit of the 1.1900 level or even a breakout. To the downside the most important support levels are at the 1.1700 level followed by the 1.1600 level. The 1.1600 zone has acted as a good support in the past, but now the 200 day EMA (blue line) is getting closer and closer to that level (the 1.1600) contributing to making the zone a significant support.

Possible loss of momentum on copper

So far this year, the price of copper has kept a very good bullish trend and is getting ready to close the year in a positive note. However, during the last few months of 2017, the price of copper has been consolidating around the 288.85 level as support and the 325.86 level as resistance. The 55 day EMA has also acted as a very good support or resistance zone. Lately, the price of copper has broken above the 55 day EMA and the 306.00 level, but the daily candles are showing us that the bullish momentum may be weakening and we could have a bearish retracement. The stochastics indicator is in the overbought zone and that could also be a signal of a possible reversal or correction.

Bullish flag on the Pound

Flags are chart patterns that usually act as continuation patterns. If the trend coming into the formation is bullish, then the asset has a higher probability of continuing higher, but the price may actually break out of the pattern in any direction. On the daily chart of the GBP/USD we can see that the price has formed a bullish flag. It is called a bullish flag, because the trend coming into the formation is bullish, but the flag itself has a small inclination to the downside. The GBP/USD has really found a good support at the 1.3300 level where we can find the 55 day EMA (purple line). In order for the bullish trend to continue, the price must break above the 1.3600 level. To the downside, the 1.3100 level could become a good support along with the 200 day EMA (blue line).

The EUR/USD short term

The EUR/USD has formed a breakout-pullback pattern over the 15 minute chart during this Thursday’s session. The Euro versus the Dollar has been very volatile since the Federal Reserve raised its interest rates, but it painted a dovish horizon for its monetary policy during 2018. When the EUR/USD broke below the 1.1800 level, it made a low at the 1.1770 level and pulled back to the 1.1800 level, which could now act as resistance. If the price of the EUR/USD bounces to the downside from the 1.1800 level, then it would be completing a breakout-pullback pattern, but in order for the bearish trend to continue, the price must break below the 1.1770 level.

Small comeback on gold

Gold takes advantage of the weakness in the US Dollar and tries to pull back to the upside as shown on the daily chart of the precious metal. On the chart we can see that the 200 day EMA (blue line) was a great support level before the price broke to the downside. Usually, good support levels could become good resistance levels or vice versa. Therefore, if the price of gold continues pulling back from the low at the 1236 level, it may reach the 200 day EMA at the 1268 level. The 200 day EMA may become a resistance or the price of gold may just go back down from the current levels and break below the 1236 level to try to reach the 1200 zone, which could act as a better support area.

The Dollar keeps rallying

The Dollar index has broken above the 94.00 level as shown on the daily chart while the bullish momentum may continue. The greenback has been supported by the possibility that the FED will raise its interest rates during the next meeting this Wednesday. If the index keeps rallying, it may reach the 95.00 level where it has already found resistance. In this case, the 200 day EMA is very close to the 95.00 level, making that zone an important resistance. On the other hand, the stochastics indicator is in the overbought zone, but if it drops below the 80% zone, then the Dollar index may pull back to the 93.00 or 92.00 level. In reality, the 91.00 level could act as a better support.

The Pound stays weak

The GBP/USD could not confirm the break out above the 1.3500 level and falls back down slowly towards the 1.3300 zone where we can find the 55 day EMA (purple line). On the daily chart of the GBP/USD we can see that the price has formed what it appears to be a bullish flag. If the price breaks above the 1.3500 level, then the bullish flag pattern may be confirmed, but a break out of the 1.3600 level would be a better confirmation. On the other hand, the stochastics indicator has room to keep falling before entering the oversold area, therefore the price of the GBP/USD may try to drop below the 1.3300 level and visit the 1.3200 level. A better support could be the 1.3100 zone where we can find the 200 day EMA (blue line).

The EUR/USD loses direction

During this Friday’s session, the EUR/USD loses strength and falls to the 1.1750 zone, from where it bounces rapidly to the upside and goes back to the zone around its 55 day EMA (purple line), just below the 1.1800 level. Around that zone, the EUR/USD loses its direction and stays consolidated. The Stochastics indicator is in the oversold area, showing us that the pair may try to break above the 1.1800 level. Above that level, the next resistance could be the 1.1900 level. But since the pair may breakout in any direction, to the downside, the 1.1700 level may act as support, followed by the 1.1600 level or the 200 day EMA (blue line).

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The Dollar recovers

The Dollar index had fallen below the 93.00 level, but it couldn’t reach the 92.00 level. When the index was below the 93.00 level it made some interesting moves as shown on the daily chart. The long lower shadows on the daily candles below the 93.00 level indicate that the buyers came into the market when they saw it falling and prevented it from reaching the 92.00 level. Actually, below the 93.00 level we can see the formation of a double bottom. The Dollar has been benefited during the last few sessions due to the tax reform developments in the United States. At the moment, the Dollar index reaches its 55 day EMA around the 93.54 level. The 55 day EMA may act as resistance, but the index could try to go and reach the 94.00 level However, a better resistance could be found at the 95.00 level where we can find the 200 day EMA (blue line).

The 1.1800 level is support on the EUR/USD

The euro versus the Dollar has lost its bullish momentum once it got to the 1.2000 zone and pulls back to the 1.1800 level. Right now the 1.1800 level could act as support, because it was resistance in the past. On the daily chart of the EUR/USD we can also see that the 55 day EMA is very close to the 1.1800 level and could contribute to make that zone a very good support for the pair. Below the 1.1800 level, the most important supports are at the 1.1700 level and the 1.1600 level, along with the 200 day EMA. The stochastics still have a lot of space to keep falling, therefore the price of the EUR/USD may drop some more. To the upside, the most important resistance is at the 1.2000 level and the 1.2100 level.

High volatility on the Pound

The Pound versus the Dollar has had a lot of volatility during the last few sessions as shown on the daily chart. The GBP/USD has tried to break above the 1.3500 level on several occasions, but every time it tries to break above that level, it loses its bullish momentum and falls right back, leaving behind what is known as a false breakout. The pair has now fallen between the 1.3500 level and the 1.3400 level where it is stuck. We can also observe the volatility on the long shadows of the daily candles in both directions. To the downside, the zone that could act as support is the 1.3300, due to the fact that the level acted as a resistance in the past. For now the 1.3500 level is its most relevant resistance, but the 1.3600 level could also act as resistance.

Attention on gold

When an instrument has been consolidating for a long period of time we must pay attention to it, due to the fact that at any moment the price may take off in any direction. When there is high volatility in an asset, the best thing to do is to wait for it to calm down. When the market is in a range and it is consolidating, then we must be attentive to a possible breakout and higher momentum in any direction. We may be able to sense when an asset is about to break out, but we don’t know in which direction. On the daily chart of gold we can see that the precious metal has been boxed between the 200 day EMA at the 1270 level and the 1300 level. If we see a rise of volatility close to a support or resistance zone, the commodity may be getting ready to take off.