The Nikkei at the 200 day EMA

The Nikkei index has been in a downtrend lately, being hurt in part by the weak Chinese fundamentals and a global economic slowdown. Today the index has dropped to the 200 day exponential moving average, around the round number level of the 19000. The combination of the 200 day EMA and the round number level may cause this area to act as a good support and the index may try to bounce to the upside. However, the fundamentals must help the technical in order to see a change in direction on the index. If the Nikkei breaks below the 200 day EMA, then the 18668 level may act as its next support. To the upside, the lower line of the channel at the 19709 level may act as resistance in case we see a bullish bounce.

The EUR/USD goes back to the 1.0900 level

The EUR/USD made a low yesterday on the 1.0800 level and from there it bounce to the upside, all the way to the 1.0900 level, as seen on the 30 minute chart. At the 1.0900 level, the pair may find some resistance, but the bullish momentum is still in place. Since the price has already visited the zone three times and each visit is getting closer to each other, that could be an indication of a possible bullish breakout. In case the price breaks to the upside, the 1.1000 could be its next target for the pair. A bounce to the downside from the 1.0900 level could take the price back down to the 1.0800.

Inverted Head and Shoulders pattern on the EUR/USD 15 min

The inverted Head and Shoulders pattern is a bullish reversal formation that usually appear at a key support level. On the EUR/USD 15 minute chart we can see that during today’s session, the price dropped below Friday’s low and touched the 1.0800 level from where it bounces to the upside. Around the 1.0800 level we can see three troughs the form the Head and Shoulders pattern. The Neckline is the upper trendline that is broken to the upside, from there the bullish momentum accelerates and the price breaks above Friday’s low. Form the current levels, the price may continue rallying, but it may also dropped once again, trying to visit the 1.0800 which could act as support.

Oil breaks below the 40.00 level

Even though light crude oil retraced yesterday to the upside, the 41.19 level has acted as a resistance and today oil bounces to the downside and breaks below the 40.00 level to make a daily low around the 39.59 level. Amid the latest meetings by the OPEC members, there are no real fundamental reasons for oil to stage a sustainable rally and that is why it remains weak. Below the 40.00 level, the 39.00 level could act as its next support. To the upside, the 41.19 level could continue acting as resistance.

EUR/GBP: Visits the 200 day EMA

The 200 day exponential moving average or EMA, could act as a good support or resistance zone, especially when the price suddenly visits the moving average after a prolonged drop or rally. The Euro strengthens versus its main counterparts after the European Central Bank failed to provide enough economic stimuli as the market was anticipating. That is why we can see on the daily chart of the EUR/GBP that the price reaches the 200 day EMA (blue line), around the 0.7244 level, which coincides with the 50% Fibonacci retracement of the recent drop and stalls there. It is possible for that EMA to act as resistance and the price may try to bounce to the 55 day EMA (purple line), around the 0.7143 level, which could act as support. Above the 50% Fibo, the 61.8% Fibo could also act as resistance in case the price continues going higher, especially when it is just around the 0.7300 round number level.

Oil reaches the 40.00 level

The January contract on light sweet crude oil has reached the 40.00 level. A few days ago we saw the possibility of seeing oil reach that level and today it has done so. At this level, oil may try to stall or bounce to the upside, but the bearish momentum is still in place and it could try to go lower towards the 37.73 level, since there are no strong fundamental reasons for oil to rally for now. To the upside, the 41.19 level could act as a temporary resistance, above that level, the 44.00 level could act as its next resistance.

Head and Shoulders pattern on the Kiwi

The New Zealand Dollar versus the US Dollar has formed what it appears to be an inverted Head and Shoulders pattern on the daily chart. By breaking above the 55 day exponential moving average (purple line), the price has also broken above the pattern’s neckline or confirmation line. At the moment the price is trying to retrace a little bit, but that is normal in this type of formations. The price may continue higher and the 200 day exponential moving average, around the 0.6803 level may act as its next resistance.