Bullish flag on the Kiwi

The “Bullish Flag” is a continuation pattern that forms at the end of an uptrend. The pattern forms when the price consolidates after a bullish run and starts going sideways, but with a slight slope to the downside. On the daily chart of the New Zealand Dollar versus the US Dollar we can see that once the price touched the 200 day exponential moving average (blue line), it started correcting to the downside and creating what we call a bullish flag. Today the price breaks below the 0.6700 level and it is close to touching the 55 day exponential moving average (purple line), which is just above the 0.6600 level. The 55 day EMA may act as a support and the price may try to bounce to the upside from there, but if it breaks that zone to the downside, then the bullish flag would be invalidated and the price may try to go and reach the 0.6500 level. To the upside, the 0.6800 may act as a resistance, but the 200 day EMA may act as a stronger resistance on the Kiwi.

Symmetrical triangle on the EUR/JPY

The Euro versus the Yen on the daily chart has been oscillating between the 133.00 and the 132.00. During that consolidation, the price has formed what it appears to be a “symmetrical triangle”. The Triangle formations usually act as continuation patterns, meaning that the price continues in the direction where it was coming from coming into the formation, but in reality the price may break out in any direction. If the price breaks to the downside, then the 131.00 level could act as support. If the price breaks to the upside, then the 135.00 level could act as resistance.

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Incredible rally on light crude oil

The December contract for light crude oil rallied for today to the 46.00 zone after the oil inventories came out lower than expected. This has caused traders to close their short positions rapidly, causing a short squeeze. At the moment, the 46.00 level may act as a resistance and oil may try to bounce from that level to the downside, especially because the 55 day exponential moving average is very close to that zone. If the price bounces to the downside, then the 44.00 level may act as support. To the upside, if the price breaks above the 46.00 level, then the bullish momentum may accelerate and oil could go and visit the 50.00 level once again.

EUR/JPY: Possible breakdown below the 133.00 level

The Euro versus the Yen has come back to its bearish trend amid a rise in risk aversion, which has caused the Yen to strengthen. At the moment, the pair is trying to break below the 133.00 round number level and if the breakdown is confirmed then we could see a visit to the 132.00 level. To the upside, if the price goes back above the 133.00, then the 134.00 could act as its next resistance.

Possible breakdown from the 44.00 level on light crude

The 44.00 level has been a very good support for light crude oil since the end of August and even though the price has tried to break it to the downside, it has always bounced back to the upside. However, oil has had a very good sustainable downtrend as we can see on the daily chart and it is possible that this time the price is falling with enough force to break below the 44.00 level. If the 44.00 level is breached to the downside, then the bearish momentum may accelerate and the price may try to go and visit the 40.00 level. But if the price bounces from the 44.00 to the upside, then the 46.00 may act as a resistance.

The USD/CHF reaches a resistance zone

The Dollar has been strengthening versus the Swiss Franc due to the fact that if the European Central Bank expands its economic stimulus, then most probably the Swiss National Bank would have to lower its interest rates even more, which are currently already in negative territory. The 0.9800 level could act as a resistance as we can see on the daily chart and from there the price may try to bounce to the downside. However, if the price breaks above that level, then the next round number level of the 0.9900 could act as resistance. To the downside, the 200 day exponential moving average around the 0.9572 level could act as support.