WTI oil at the 200 day EMA

WTI oil breaks below the 66.27 support zone and accelerates its bearish momentum towards the 200 day EMA around the 64.30 level. We have been analyzing the 66.27 support zone since the first bullish bounce of the price and we also said that the more visits we see to that level, the higher the probability of the price breaking it to the downside. The 64.30 zone was a good support for the commodity during a better part of June, therefore besides the 200 day EMA, the 64.30 level may also contribute to stall the bearish momentum on oil. In case of a bullish bounce from the 200 day EMA, the 66.27 level could change from support to resistance. Above the 66.27 level, oil will be entering again the congestion area with a resistance at the 70.00 level. On the other hand, if WTI oil breaks below the 200 day EMA, then it could fall to the 62.00 level.

Possible pullback on the Dollar Index

The Dollar index is clearly overextended to the upside as shown on the daily chart. Once the index broke above the 96.00 level, it accelerated its bullish momentum and it is coming closer to the 97.00 level. Since the instrument is overbought, it may be ready for a profit taking pullback, possibly from the 97.00 level. For now, the 96.00 level is acting as its closest support, but if the index breaks below the 96.00 level, then the 95.00 zone which was resistance in the past may change to support. The angle and inclination of the 55 day EMA (purple line) is showing us that the bullish trend is still in place and the instrument may try to head higher.

Will the Dollar continue rallying?

The US Dollar has been rallying on the back of the Turkish crisis which has been escalating, putting pressure mainly on the Euro, which is more than 50% part of the Dollar Index. The Turkish crisis has also put pressure on other main currencies and emerging market currencies. On the daily chart of the Dollar index we can see that the instrument broke above the 96.00 level, but the last daily candle is in the shape of a doji. The doji is a Japanese candlestick pattern of indecision. When a doji appears at the end of a trend, it may be telling us that the trend is losing steam or a trend reversal is about to happen. Therefore, the index may pull back below the 96.00 level in a profit taking correction and maybe visit the 95.00 level. On the other hand, if the crisis continues in Turkey, the Dollar may keep rallying and it may reach the 97.00 level, which could at as resistance.

One year lows on the EUR/USD

The EUR/USD breaks below the 1.1500 level as shown on the daily chart and reaches the 1.1400 level. This is the first time the EUR/USD visits the 1.1400 level in a year. The pair keeps its bearish trend and it may try to continue falling to the 1.1300 level. On the other hand, the price may leave behind a false breakout of the 1.1400 level and go back up in a correction. In case of a pullback, the EUR/USD may find some resistance at the 1.1500 level, which was support in the past. Above the 1.1500 level, its most relevant resistance is the 55 day EMA around the 1.1676 level, which has been acting as a good resistance. Above the 55 day EMA, its 200 day EMA at the 1.1835 level may also act as resistance. Another possible scenario is that the EUR/USD may consolidate between the 1.1400 level and the 1.1500 level without taking a clear direction.

Bullish breakout on the Dollar

The Dollar index finally breaks out above the 95.00 level after almost three months consolidated between that level as resistance and the 94.00 as support. The Dollar index keeps its bullish trend, which never really reversed even with the recent consolidation. The 55 day EMA is showing us that the bullish trend is gaining strength. The index consolidated around the 95.00 level during four sessions before breaking out, something that it did not do during the previous visits to that level. The Dollar index breaks above the 96.00 level and if it continues rallying, it may reach the 97.00 level, but it has not confirmed such a breakout. In case of a pullback, the 95.00 level may become support for the Dollar index. Fundamentally, the Dollar is still strong and it may continue rallying during the upcoming week, but it may also try to correct the current spike up.

Oil accelerates its bearish momentum

WTI oil was consolidating around the 55 day EMA (purple line) for the last few weeks, with the 70.00 level acting as a good resistance zone. Oil has been pressured to the downside by the trade war between the United States and China. The trade war has lowered the demand for oil from China, which is one of the main commodities consumer in the world. The US oil exports to China have dropped 70% in the last few months when the trade war started between the two nations. The US oil inventories reading during today’s session showed that the oil stockpiles have lowered somewhat, but the gasoline reserves have increased. During today’s session, the price of WTI oil drops from to the 66.27 level, which acted as support in the past and may hold the price again this time. However, if WTI oil breaks below the 66.27 level, it may drop to the 200 day EMA (blue line), around the 64.17 level. On the other hand, if the price bounces to the upside, then the 70.00 level may act as resistance. Above the 70.00 level, WTI oil may have the road clear to visit again the peak at the 75.00 level.

Bitcoin accelerates its bearish momentum

The price of Bitcoin continues to fall after the SEC postpone another decision on whether or not to accept a Bitcoin ETF. Just 12 days ago, the SEC had already denied another proposal for the creation of the first Bitcoin ETF, causing the price of the cryptocurrency to drop below the 8000 level. The 200 day EMA (blue line) at the 7769 level was holding the price temporarily, but the price falls to the 55 day EMA at the 7260 level. From the 55 day EMA, the price of Bitcoin makes a bearish gap to fall to the 6717 level. On the daily chart of Bitcoin we can see that its next support could be the 6000 level or the low at the 5769 level. On the other hand, if the price retraces to the upside, the same 55 day EMA which acted as support could change its role to resistance. Above the 55 day EMA, the 200 day EMA may also act as resistance.

Possible bearish continuation on the USD/CAD

After a consolidation, the price of an instrument has a higher probability of continuing in the direction of the main trend. That is why, after the consolidation that we are seeing on the daily chart of the USD/CAD, the price may try to continue lower, due to the fact that the trend coming into the consolidation is bearish. Usually, during consolidations like this, the price may form a triangle, flag or pennant, which may all act as reversal or continuation patterns. If the price of the USD/CAD continues falling, then the 200 day EMA at the 1.2923 level may act as support. Below the 200 day EMA, the price may have the road clear all the way down to the 1.2739 level. On the other hand, if the USD/CAD tries to correct to the upside, then the 55 day EMA may act as resistance along with the 1.3100 level. Above the 1.3100 level, its next resistance could be the 1.3200 or the peaks at the 1.3387 level.

Resistance on the Dollar seems unbreakable

The Dollar index visits one more time the 95.00 level from where it bounces to the downside during today’s session. The Dollar has weaken after the US jobs report came out lower than expected, but we must keep in mind that the 95.00 level has been a very good technical resistance for the instrument. In fact, the index has visited the 95.00 zone at least 12 times since the end of May. However, the daily candle lows are getting higher than the previous ones, which is an indication that the pressure is pushing to the upside. The index keeps a bullish trend, since the 55 day EMA is still pointing to the upside, but the trend is losing its momentum. The index may be waiting for the FED to raise its rates possibly in September to take a clear direction. For now, the 94.00 level may still act as support, along with the 55 day EMA. The 200 day EMA at the 93.00 level may be a longer term support for the Dollar index.

ActivTrades tools: SmartCalculator

In order to make your trading more simple and successful, ActivTrades has created a great tool called the SmartCalculator to help you manage your risk and positions. The most important thing in trading is knowing how to manage our capital and your risk. You may have a very good trading strategy, but a trading system is not complete unless you complement it with sound risk management rules. To simplify your decision process and don’t miss out on the next trading opportunity, the SmartCalculator makes it easy to figure out how much risk you are taking. Figure out your risk-reward ratio just by plugging in your parameters and tweak it to adjust it to your needs. To make use of the SmartCalculator by ActivTrades, please visit the following link:

https://www.activtrades.com/en/activtrades-smartcalculator

Possible support on the USD/CAD

On the daily chart of the USD/CAD we can see that the pair has been falling from the double top formation that it created around the 1.3387 level. Once the price reaches the 55 day EMA (purple line), it tries to consolidate, but the bearish momentum continues and the price of the USD/CAD breaks below the 1.3100 level and below the 55 day EMA to reach the 1.3000 level. The last few daily candles are in the shape of a doji and that is an indication that the pair is undecided at the moment and the 1.3000 level may act as support. Therefore, if the price bounces to the upside from the 1.3000 level, the 55 day EMA along with the 1.3100 level may act as resistance. On the other hand, if the price breaks below the 1.3000 level, then the 200 day EMA (blue line), around the 1.2920 level may act as support. The most relevant support is at the 1.2739 level where it bounced to the upside in the past.

Symmetrical triangle on the EUR/USD

The EUR/USD on the daily chart has been consolidating and inside such consolidation, a symmetrical triangle has formed. The symmetrical triangle could act as a continuation patter, but the price may breakout in any direction, really. The range inside the triangle starts to shrink and that causes the pressure to accumulate until the price breaks out in any given direction. To the upside, the price of the EUR/USD may find some resistance at the 200 day EMA, around the 1.1868 level. Above the 200 day EMA, its next resistance could be the 1.2000 level. To the downside, the 1.1500 level may act as support, but in case of a breakdown, the EUR/USD may find another support at the 1.1400 level.

Consolidation on gold

Gold has entered into a consolidation phase as shown on the daily chart of the precious metal. The price of gold consolidates between the 1211 level as support and the 1236 level as resistance. Inside the consolidation, gold has formed what it appears to be a bearish flag or pennant. It is called a bearish flag, because the trend coming into the consolidation is bearish. Therefore, there is a higher probability of seeing a breakdown to the 1200 level, which could act as support. But the price may also break to the upside and form a pullback or correction. Above the 1236 level, the 55 day EMA may act as a resistance, but a better resistance could be the 1273 level, due to the fact that at that level we can find its 200 week exponential moving average.

Death cross on copper

The death cross pattern is a moving average cross over pattern that has a very peculiar name due to the fact that the pattern has negative implications for the underlying asset in mid or longer term. The pattern has better chances of success on the daily chart. The pattern is confirmed when the 55 day moving average (purple line) crosses below the 200 day moving average (blue line). The cross is indicating us that the trend has reversed to the downside and the price may continue falling. At the same time we must keep in mind that when the cross happens, the price of the asset is already over-extended to the downside and probably ready for a correction. In fact, there is a 50% chance of seeing a pullback after a death cross is confirmed. The price of copper pulls back form the 270.00 zone to the 283.62 area where we can find the 200 week EMA. The price may continue falling, but the 270.00 level may act as a temporary support. However, if the price breaks below the 270.00 level, the bearish momentum may accelerate even more.

Breakout-pullback pattern on Bitcoin

The price of Bitcoin has been supported lately by the growing acceptance of the cryptocurrency by the large financial institutions. On the daily chart of Bitcoin we can see that the price started to rise from the 5769 level and breaks above the 6898 level along with the 55 day EMA (purple line). The bullish momentum takes the price of Bitcoin to the 200 day EMA, which is currently just below the 8000 level. The 200 day EMA tried to act as a resistance, but the price continued higher to break above the 8000 level and reaching a high around the 8472 level to pull back to the 8000 level. If the price of Bitcoin bounces to the upside from the 8000 level, then a breakout and pullback pattern may develop and Bitcoin may try to reach the 9000 level. To the downside, below the 200 day EMA, its next support level could be the 55 day EMA and the 6898 level.

General Motors plummets

The tariffs on steel and aluminum by the US has started to affect the outlook for the futures earnings of General Motors and possibly other US car manufacturers. Even though GM has reported earnings above expectations for the second quarter, its revenue has fallen and that causes the price of its stock to plummet during today´s session. The price of GM has been falling from the high that it made at the 44.94 level during last month and reaches the 55 and 200 day EMAs zona where it consolidates. After consolidating above the 38.68 level for around 15 trading sessions, the stock makes a bearish gap and drops to the 36.51 level. Another factor that has been eating into GM’s revenue and sales is the fact that the US Dollar has risen considerably versus the Argentine Peso and the Brazilian Real, causing GM’s cars to be more expensive in those countries, causing demand to drop. In case of continuing lower, the price of GM may find some support around the low at the 35.25 level. To the upside, the 38.68 level may change to resistance in case the price pulls back to that zone.

EMAs confluence on the EUR/JPY

The exponential moving averages or EMAs may act as very good support or resistance zones, especially in areas where they coincide on different time frames. For example, on the daily chart of the EUR/JPY we can see that the 55 day EMA (purple line) is at the 129.84 level and exactly in that same area is where the 55 week EMA is located. That is why it is of no surprise to see the price of the EUR/JPY stall at that zone and it may even try to bounce to the upside. The current drop on the pair is really a correction from a bullish trend in the midterm. If the price bounces to the upside from the 55 day EMA, then the 200 day EMA (blue line) may act as a temporary resistance. On the other hand, if the EUR/JPY breaks below the 55 day EMA, its next support could be the 127.98 level where we can find its 200 week EMA. On the daily chart we can also see that the most relevant support is at the 125.00 round number level.

Possible hammer on the USD/JPY

The USD/JPY has fallen recently on comments by Donald Trump where the president of the United States is not happy with a strong Dollar. That was the main reason why the USD/JPY has fallen close to the 55 day EMA around the 110.67 level. Towards the end of the session, the price goes back up and closes around the opening level, leaving behind what is known as a hammer formation. The hammer pattern is a bullish reversal formation and if the next candle is bullish, then the price of the USD/JPY may change direction to the upside. The 113.00 level may act as resistance in case the price reaches that zone one more time. To the downside, the 55 day EMA may act once again as support in case the price drops to that zone and below that level, the 110.00 area along with the 200 day EMA (blue line) may also act as support on the USD/JPY.

Resistance on the EUR/USD

The EUR/USD has found a good resistance on its 55 day EMA as shown on the daily chart, but the more frequent the price visits that moving average, the higher the probabilities of seeing a bullish breakout. In case of a breakout, the EUR/USD may continue rising towards the 200 day EMA (blue line), around the 1.1900 level. Above the 1.1900 level, its next resistance could be the 1.2000 level. To the downside, in case of a bearish bounce, the 1.1600 level may act as support followed by the 1.1500 zone which could also act as support. Another possible scenario is that the price of the EUR/USD may consolidate between the 1.1700 level and the 1.1600 level without taking a clear direction.

ActivTrades new Bahamas office

The new ESMA regulations are coming into effect and as we all know, leverage will be affected significantly with the new rules. There will no longer be 400:1 margin on Forex trading, unless you are a professional trader with certain criteria to meet. The new margin now for Forex trading is 30:1 according to the ESMA. But you may still keep trading out of the EU’s jurisdiction by opening account at the new ActivTrades Bahamas office and keep all the privileges as before. This is a great news for those that thought that they would lose their leverage advantage. For more information on the new Bahamas office, please visit the following link and browse through ActivTrades Bahamas office Website. Great trading to all of you.

https://www.activtrades.bs/en/

The GBP/USD finds support

On the daily chart of the GBP/USD we can see that the pair has dropped to the 1.3000 zone where it finds some temporary support. The Pound has been weakening amid the uncertainty surrounding the Brexit process, which could end up being dramatic for the British economy. Besides the Brexit effects, the GBP/USD has also been pressured by strength on the US Dollar, which has been supported by the possibility of another two rate hikes before the end of the year. In case of a bullish bounce from the 1.3000 level, the GBP/USD may retrace to the 1.3300 level where we can find the 55 day EMA. If the pair continues lower and breaks below the 1.3000 level, then its next support could be the 1.2900 level.

Will the GBP/USD stay at support?

The GBP/USD has found a very good support level at the 1.3100 zone from where it has bounced seven times already to the upside, as shown on the daily chart. The pair may find once again a support at the 1.3100 visit, but the more times the price visits the level, the higher the probability of it breaking it. In case of a bearish breakdown, the 1.3000 level may act as a temporary support, but a breakdown of that level would accelerate the bearish momentum and cause the price to fall more rapidly. Another possible scenario is that the price may stay consolidated between the 1.3100 level and the 1.3400 level without taking a clear direction. Above the 55 day EMA, in case of a bullish correction, the 200 day EMA at the 1.3500 level may act as a very good resistance.

Oil completes another leg down

The price of WTI oil has been falling from the 75.00 area from where it bounced to the downside to break below the 72.07 level and fall to the 55 day EMA (purple line) as shown on the daily chart. After the first leg down, the price of WTI oil consolidates for a couple of sessions around the 70.00 level and the 55 day EMA. At the beginning of this week, the price of oil accelerates its bearish momentum and breaks below the 68.00 level to reach a low around the 66.65 level. If the price of WTI oil keeps dropping, then the 65.00 zone could act as a support, followed by the 200 day EMA (blue line), which could also act as support along with the 62.00 level. To the upside, in case of a bullish pullback, the price may find some resistance around the 70.00 level. For now the price of crude may head in any direction, really, depending on the developments in the Middle East around Iranian sanctions.

Possible hammer on the GBP/USD

The GBP/USD has fallen during today’s session to the 1.3100 level as shown on the daily chart. The drop on the GBP/USD comes from the bearish bounce at the 55 day EMA (purple line). If the pair continues dropping below the 1.3100 level, then its next support could be the 1.3000 level. After the bullish bounce from the 1.3100 level, the pair forms a hammer pattern. The hammer is a bullish reversal pattern, but it is confirmed when the next candle is bullish. Therefore, we could see a bullish pullback on the GBP/USD. If the pair retraces to the upside, the 1.3400 level could act as resistance, but a better resistance is at the 1.3500 level where we can also find the 200 day EMA (blue line). Another possible scenario on the GBP/USD is that the price may consolidate between the 1.3100 level and the 1.3300 level.

WTI oil retraces to support zone

On the daily chart of WTI oil we can see that the commodity consolidated around the 75.00 level and the 73.00 zone. From that consolidation the price breaks below the 73.00 level to drop to the 70.00 level where it tried to stall for a minute. But the drop was really strong and the price continued dropping to the 55 day exponential moving average (purple line) around the 69.18 level. From the 55 day EMA the price bounce to the upside and the actual daily candle is in the shape of a hammer. The hammer is a bullish Japanese candlestick reversal pattern, therefore the price may bounce back to the upside. In case of a bullish pullback, the price may find some resistance at the 73.00 level and the 75.00 level may also act as resistance. To the downside, below the 68.00 level, its next support could be the 65.00 zone.

Resistance on the EUR/USD

On the daily chart of the EUR/USD we can see that the pair has found a good resistance zone at the 55 day exponential moving average (purple line), around the 1.1763 level. The price of the EUR/USD drops again below the 1.1700 level, but the pair is actually consolidating around that zone and it has shrink its range. If the pair continues dropping, the 1.1600 level may act as support followed by the 1.1500 zone. Regardless of the current consolidation, the bearish trend is still in place on the EUR/USD and we may see a continuation lower. On the other hand, if the prices manages to break above the 55 day EMA, then the 200 day exponential moving average (blue line) at the 1.1900 zone may also act as resistance. Above the 200 day EMA, any of the round number levels may act as resistance all the way to the 1.2400 level.

Again resistance on the USD/JPY?

Earnings season has begun and along with it risk appetite has come back to the markets amid optimism on positive corporate results. The safe haven assets have lost ground due to investors looking for higher returns. That is why the USD/JPY has been rallying for the past two sessions and reaches the 111.39 level from where it has bounced to the downside in the past. If the pair bounces to the downside from the 111.39 level, then it would be forming a double top pattern on that zone. On the other hand, the valleys on the daily chart have been higher than the previous ones, indicating that the bullish pressure is accumulating at the 111.39 level. A breakout above the 111.39 level could take the USD/JPY to the 113.00 level. To the downside, the 110.00 level could act as support along with the 55 and 200 day EMAs just below that level.

High volatility on the GBP/JPY

On the daily chart of the GBP/JPY we can see that this Monday’s session was very volatile, but indecisive. The long shadows in both directions on today’s daily candle is telling us that the pair tried to break above the 55 day EMA (purple line), but at the same time it tried to bounce from that moving average to the downside. At the end of the session, the real body of the candle closed around the opening and that is an indecision signal around the 146.91. To the upside, the 200 day EMA (blue line) at the 148.16 level could act as resistance. Above that moving average, its next resistance could be the 151.00 level. To the downside, the low at the 143.20 level could act as support.

Important resistance on the EUR/JPY

On the weekly chart of the EUR/JPY we can see that the instrument had a very good bullish trend from the 115.00 zone to the 137.51 zone, before retracing to the downside. On the daily chart of the EUR/JPY the trend seems to be bearish, but in reality it is not a bearish trend, but rather a correction of the main bullish trend on the weekly chart. Therefore, we could see the pair head back up in the longer term. However, at the moment the EUR/JPY has found a very good resistance at the 55 week EMA (purple line), around the 129.84 level. Since the bullish bounce from the 125.00 level to the upside, the pair has consolidated between the 200 week EMA at the 127.87 level and the 55 week EMA. Around the current level we can see a bearish trend line (red line), which could act as resistance, but a breakout of that resistance could take the pair to the 133.00 zone. To the downside, in case of a breakdown below the 200 week EMA, its next support could be the low at the 125.00 level.

Webinars: Let's Talk Trend Lines and Channels

When we first start in technical analysis, the first thing we learn is the basics like identifying support, resistances, trendlines, and channels. We may think that those things are basic, but they are really tools that we are going to use for the rest of our trading career. In fact, as time passes by we end up using too many tools or indicators that cloud our judgement, then we go back to the basics like trend lines and channels, because we realize that is the one thing that always works. To learn more about this topic, please register in the link below to the Webinar by Martin Walker, expert in market analysis; provided by ActivTrades. The event will take place online, free of charge, just follow the link to register:

https://www.activtrades.com/en/webinars

The event will take place on July 10th from 7pm -8pm London Time

Possible hammer formation on the NZD/USD

The hammer is a bullish reversal Japanese candlestick pattern. On the weekly chart of the NZD/USD we can see that the price fell to the 0.6700 level and bounces to the upside, leaving behind a hammer formation. On the daily chart of the Kiwi at the left hand side of the image we can see that the price has been falling from the 55 day EMA to the 0.6700 level and forms what it appears to be a double bottom formation. Both, the hammer and the double bottom patterns are bullish reversal patterns. Therefore, we have a high probability of seeing the NZD/USD retracing to the upside. Above the 0.6800 level, its next resistance could be the 0.6900 level, but the 0.7000 level could also act as resistance. On the other hand, if the price continues dropping, then the pair may reach the 0.6600 level.

Oil tries to break resistance

The bullish pressure on WTI oil is accumulating around the 74.45, where the price finds a good resistance. However, the bullish trend in the short term is still in place, therefore the price may continue rising. On the daily chart of WTI Oil we can see that 10 out of the last 12 daily candles have been bullish and that is an indication that the bullish trend is strong. The instrument is clearly overextended to the upside, but if it continues rallying, then the 77.00 level could act as resistance, due to the fact that in that zone we can find the 200 month EMA. On the other hand, if the price bounces to the downside, then the 70.00 level or the 68.00 level could act as support. Another possible scenario is that the price of WTI oil may consolidate between the 73.00 level and the 75.00 level until new fundamental data comes in to the markets and makes it take a more clear direction.

Possible bullish continuation on WTI oil

WTI oil has had a very good bullish trend, even though OPEC has been thinking about raising its production output. It seems like the shortage may continue to support oil prices and on the weekly chart of WTI oil on the right side of the image we can see that the instrument has been rising for two weeks now. At the 74.44 level, WTI oil has found a good resistance zone, but the price may continue higher especially now that the golden cross has been confirmed on the weekly chart. The gold cross is when the 55 period EMA crosses above the 200 period EMA and it has bullish implications in the midterm. Therefore, if the price of WTI oil breaks above the 74.44 level, then it may reach the 77.00 level where we can find the 200 month EMA and which may act as resistance. To the downside, the 68.00 level or the 62.00 level may act as support. Another possible scenario is that the price may consolidate between the 74.44 level and the 72.00 level without taking a clear direction.

Oil rallies above an important resistance

On the daily chart of the WTI oil we can see that the commodity has been pulling back from the 72.91 zone to the 63.33 level. Oil consolidates around the 65.00 level since the end of May, but today oil rallies rapidly and breaks above the 55 day EMA (purple line) and breaks above the 68.00 level. In case of continuing higher, the price of oil may reach a resistance area around the 70.00 level. Above the 70.00 level, the zone around the 72.00 level and the 72.91 level may act as resistance. In case the price of WTI oil breaks below the 68.00 level, it would be entering again its congestion area around the 65.00 level where it may consolidate again. To the bottom, the 63.33 level could act as a support, but the 62.00 level could act as a better support with the 200 day EMA (blue line) crossing very close around that level.

ActivTrades tools: SmartPattern

One of the great tools that ActivTrades has for its clients is the SmartPattern indicator, available for MetaTrader 4 and 5. If you are a Live client at ActivTrades, then you can download and install the SmartPattern indicator. The indicator gives you certain target levels on the instrument to the upside, to the downside and sideways in case of consolidation. It also gives you the breadth of the market by measuring positive and negative changes in the patterns. Additionally, you can also get the approximate price range in the next 20 bars. Don’t miss out on this great opportunity to get additional support for your trades. Try the tool in combination with your traditional analysis. For more information on how to download the add-on, please visit the following link:

https://www.activtrades.com/en/SmartPattern

Gold tries to break an important support

On the weekly chart of gold we can see that the commodity has falling from the double top pattern at the 1365 level and tries to break below the 200 week EMA, blue line, at the 1273 level. In case of continuing dropping, the price of gold may reach the low at the 1236 level, which could act as support. Below the 1236 level, its next support level could be the 1200 zone. The red bullish trendline has acted as a good support, therefore the price of gold may pull back to the upside. In case of a bullish pullback, the 55 week EMA, just below the 1300 level could act as resistance. Above the 1300 level, the next resistance levels could be the 1326 level, but the double top at the 1365 level could act as a better resistance.

The bearish momentum accelerates on the GBP/JPY

The Pound continues losing ground versus its main counterparts, especially versus the Yen while the risk aversion rises, due to the trade conflicts between the United States and China. On the daily chart of the GBP/JPY we can see that the pair has been falling from the 154.00 zone with some pullbacks on the way down. Once it got to the 143.00 zone, the GBP/JPY started retracing to the upside and visits the 148.00 level where we can also find the 55 day EMA and where it forms a double top pattern. During today’s candle, the double top pattern is confirmed and the price of the GBP/JPY breaks below the 145.00 level. If the pair continues falling, then the 143.00 level may act as support. To the upside, the 148.00 level is still its most important resistance. For now the bearish trend is still in place, confirmed by the death cross of the 55 and 200 day EMAs and by the angle of inclination of the 55 day EMA.

Dead cat bounce on Bitcoin

Since the beginning of April, the price of Bitcoin rallied very close to the 10000 Dollar zone, but it couldn’t reach exactly that level to start retracing to the downside. The price breaks below the 9000 level and below the 200 day EMA (blue line) to bounce to the upside from the 8000 level. The price of Bitcoin tried to bounce back up, but the 200 day EMA acted as a resistance and the cryptocurrency drops again below the 8000 level. The bearish momentum accelerates below the 8000 level and reaches the 7000 level from where it bounces to the upside. After the bounce, Bitcoin drops rapidly and makes a gap to break below the 7000 level, forming what it is to known as a dead cat bounce. Bitcoin drops very close to the 5977 level and then consolidates around the 6495 level from where it started rising in April and forms a triangle or pennant. From the current consolidation the price may head in any direction. Above the 7000 level, the 8000 zone may act as resistance. To the downside, the 5977 may act again as support.

Double bottom on the Pound?

On the daily chart of the GBP/USD we can see that the pair has fallen again to the 1.3200 level and it may formed a double bottom pattern, which is a bullish reversal formation. The neckline or confirmation line of the double bottom pattern is just below the 1.3500 level, therefore the price must break above the 1.3500 level to continue rallying. None the less, the 1.3600 level along with the 200 day EMA may act as resistance, followed by the 1.3700 level. On the other hand, the death cross is still in place, which is when the 55 day EMA crossed below the 200 day EMA and that is an indication that the bearish trend is still in place. The pair may continue with its bearish trend and if it breaks below the 1.3200 level, then its next support level may be the 1.3100 level or the 1.3060.

The Euro plummets

Today’s comments by the European Central Bank has caused the Euro to plummet due to the fact that the central bank kept its interest rates unchanged. We must keep in mind that interest rates is what primarily moves a currency. Therefore, if the ECB does not hike, the Euro has no reason to rally. On the daily chart of the EUR/USD we can see that the pair drops more than 200 pips from the 1.1833 level to below the 1.1600 level. In case of continuing falling, the 1.1500 level may act as support, but a breakdown of that level could accelerate its bearish momentum. On the other hand, due to the fast drop, we could see a profit taking pullback to the 1.1700 level or the 1.1833 level. For now, the angle of inclination and the separation of the 55 day EMA with the 200 day EMA is indicating a bearish trend.

Death cross continues on the GBP/USD

The Pound versus the Dollar had a good bearish trend that may continue further according to the death cross pattern on the daily chart. The death cross is formed when the 55 day EMA crosses below the 200 day EMA and it has bearish implications in the mid-term. What it means is that in the short term the price may pull back to the upside, but in the longer term the price may continue lower with its bearish trend. When the moving averages cross, this is not taken as an entry signal, due to the fact that the price has been falling from further up and it may be ready for a correction. That is what happened on the GBP/USD daily chart. The price of the pair drops to the 1.3200 level from where it bounces to the upside, when the death cross is formed, the price tries to go back down, but the 1.3300 level is acting as a support at the moment. Below the 1.3300 level, the 1.3200 may also act as support. To the upside, the 1.3500 zone or the 1.3600 could act as resistance.

The NZD/USD continues consolidated

The Kiwi or NZD/USD has been pulling back to the upside as shown on the daily chart and reaches its 55 day EMA around the 0.7041 level, which is acting as resistance. From the 55 day EMA the price of the NZD/USD bounce to the downside to the 0.7000 level and is currently boxed between those two levels. From the current consolidation, the NZD/USD may head in any direction, but if it breaks to the upside, the 200 day EMA at the 0.7125 level may act as resistance. Above the 200 day EMA, its next resistance is at the 0.7300 level. To the downside, below the 0.7000 level, its next support zone is between the 0.6900 level and the 0.6850 level. Another possible scenario is that the pair may continue consolidating in the current range.

Will copper continue rallying?

On the daily chart of copper we can see that the commodity had a very good rally last week and the price came to visit the 200 month EMA at the 329.46 level once more. The 200 month EMA has been acting as a good support for copper and that is why there is no surprise in the current pullback. However, the price of copper has found a good support around the 325.00 level. In case of another visit to the 200 month EMA, copper may break above that level and continue rallying. On the other hand, if the price breaks below the 321.74 level, then it would have the road clear to fall to the 314.00 level. Below the 314.00 level, the 55 day EMA may act as support, but the most important support zone is at the 304.00 level and the 301.00 level.

Resistance on the Kiwi

The NZD/USD had been falling from the 0.7400 zone to the 0.6900 area from where it retraces to the upside, as shown on the daily chart. The correction takes the price of the NZD/USD to the 55 day EMA (purple line) at the 0.7045 level where it finds a resistance. The pair consolidates below the 55 day EMA and the 0.7000 level. It seems like the bullish pressure is accumulating at the 55 day EMA and a breakout of that level could take the NZD/USD to the 200 day EMA (blue line) at the 0.7125 level. Above the 200 day EMA the pair has no more resistances until the 0.7300 level. In case of a bearish breakdown, below the 0.7000 level the pair could drop to the 0.6900 level or even the 0.6800 level.

Webinars: Let's Talk Candlesticks

One of the most commonly used chart in technical analysis is the candlestick chart. The candlesticks provide us with more complete information about the market´s behavior. For instance, a long shadow with a small real body may indicate high volatility of the underlying asset with indecision. To better understand and make use of the candlesticks pattern successfully, we invite you to the next Webinar by ActivTrades on June 12^th. The event will be conducted by professional trading expert, Martin Walker. You may attend the event online for free from 7pm to 8pm, London time. For more information and to register for the Webinar, please visit the following link:

https://www.activtrades.com/en/webinars

Gold continues consolidating

The price of gold is still consolidating as shown on the daily chart between the 1281 as support and the 1304 as resistance. At the 1304 level we can find the 200 day EMA, which has been acting as a good resistance. Even though the price has been consolidating, gold has been dropping from the 1365 level and the bearish trend may continue according to the 55 day EMA which is pointing to the downside. In case the 55 day EMA crosses below the 200 day EMA, we could have a death cross pattern which has bearish implications in the mid-term. To the downside, the 1281 level may act as support, but the 1273 level could act as a better support due to the fact that at that zone we can find the 200 week EMA. Above the 1304, in case of a bullish breakout, the next resistance could be the 1326 level.

Interesting pullback on the GBP/JPY

On the daily chart of the GBP/JPY we can see that the pair found a good support zone around the 147.00 level since March to the middle of May when the price broke below that level and falls to the 145.00 zone to drop to the 143.00 area. From the 143.00 zone, the price of the GBP/JPY starts pulling back up and reaches the 147.00 level, which could act as resistance. Since the 147.00 zone acted as support in the past, now it may act as resistance. In case of a bearish bounce from the 147.00 level, the GBP/JPY may find some support at the 145.00 level or the 143.00 level. Above the 147.00 level, its next resistance zone could be around the 148.80 level where we can find the 200 day exponential moving average.

The GBP/USD is boxed

The GBP/USD is boxed between the 1.3300 level and the 1.3400 level as shown on the daily chart. The bearish trend on the GBP/USD has been kept from the high at the 1.4300 zone, but since it got to the 1.3200 level, the pair has been correcting to the upside. From the current congestion area the GBP/USD may head in any direction, but the death cross at the 1.3600 level is indicating a possible continuation of the bearish trend. The death cross is formed when the 55 day EMA (purple line) crosses below the 200 day EMA (blue line). The pattern is showing us that the pair may continue lower in the mid-term. In case of a bearish bounce, the 1.3200 level may act as support. To the upside, the 1.3500 level and the 1.3600 level may act as resistance.

The EUR/JPY in a possible bearish bounce

The EUR/JPY falls to the 125.00 zone from where it bounces to the upside and reaches a resistance zone around the 127.87 level where we can find the 200 week EMA. Above the 200 Week EMA, its next resistance could be the 130.19 zone where we can find the 55 Week EMA. However, the 55 day EMA keeps retreating from the 200 day EMA as shown on the daily chart and that is a sign that the bearish trend is still strong, regardless of the current bullish pullback. On the weekly chart the pair has formed a hammer pattern, which is a bullish Japanese candlestick pattern. Therefore, the price may continue higher. A most important resistance for the EUR/JPY on the daily chart is the highs around the 133.00 zone. To the downside, in case of a continuation of its bearish trend, the low at the 125.00 level may act as support.

Will the USD/JPY keep falling?

The USD/JPY rallied since the middle of March from the 104.63 level to the 111.39 level. From the 111.39 level, the price of the USD/JPY starts retracing to the downside and breaks below the 200 day EMA at the 109.41 level and below the 55 day EMA to reach a low at the 108.11 level. The bullish trend is still in place on the daily chart, but if the pair keeps falling, it may drop to the 106.62 or to the 104.63 level. On the other hand, since the bullish trend is still in place, the USD/JPY may go back up to the 200 day EMA, which may act as resistance. However, the most important resistance on the USD/JPY is at the peak of the 111.39 level, which it should break to the upside in order to go back to its bullish trend.