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.

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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.

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