The Dollar index stays bullish

On the daily chart of the Dollar index we can see that the instrument had a good rally from the 95.70 zone to the 98.00 zone. During the past few days, the index was consolidating around the 98.00 zone, but today it breaks to the upside and it could continue going higher, especially when we see a “golden cross” on the moving averages. The golden cross is when the 55 day exponential moving average, purple line, crosses above the 200 day exponential moving average, blue line. The golden cross has bullish implications; therefore, the index may try to reach the 98.59 level, which could act as resistance. The index is clearly over-extended to the upside and it could try to retrace to the downside. If the index retraces to the downside, then its next support could be the 97.00 level.

Possible “hammer” on the USD/CAD

The “hammer” formation is a bullish reversal pattern where the candle has a long lower shadow with a small real body on the upper zone of the candle. The long lower shadow is the key on this pattern, because it tells us that at some point the sellers where having control of the instrument and brought the price down. However, the buyers took control of the instrument and brought the price back up, leaving behind the long lower shadow. On the daily chart of the USD/CAD we can see that Wednesday’s candle has the hammer formation. If this Thursday’s candle closes with a bullish candle, then the hammer formation will be confirmed and the price may change in the direction to the upside. If the price continues going higher, then the next resistance could be the 1.3200 level, followed by the 1.3300 level. To the downside, below the 200 day EMA, blue line, its next supports could be the 1.3047 level or the 1.3000 level.

Well defined range on gold

Gold has formed a very good horizontal channel as shown on the daily chart, with the 1250.00 level as support and the 1269 level as resistance. Range trading could be tricky since the price could break out in any direction in any moment. That is why the most conservative option is to wait for the breakout and then the pullback to enter in the direction of the original breakout. Below the 1250 level, its next support is still the 1200.00 level. Above the 1269 level where we can see the 200 day exponential moving average, its next resistance could be the 1300.00 level, especially when the 55 day EMA is right at that level now. The retracement on the Dollar has a lot to do with the rally on gold, but we need a really good reason for the precious metal to break above the 1269 level.

The USD/CAD visits the 1.3100 level

On the daily chart of the USD/CAD we can see that the pair has dropped once again to the 1.3100 zone. Just below the 1.3100 level we can also see the 200 day exponential moving average, blue line, which may contribute another support on that zone. The pair may try to bounce to the upside and if so, then the 1.3200 level may act as its next resistance. But a breakdown of the 200 EMA may accelerate the bearish momentum and the price may even visit the 1.3000 level. All depends if oil keeps rallying, which at the moment is just consolidating between the 50 and 51.60 levels.

Possible pullback on the Kiwi

The New Zealand Dollar versus the US Dollar is trying to bounce to the upside from the 200 day exponential moving average as shown on the daily chart. The 200 EMA usually acts as a support or resistance zone, therefore we could see a bullish pullback on the pair, especially when the instrument is clearly over-extended to the downside. In case the price breaks to the downside, its next support could be the 0.7000 level. To the upside, we can see that there are no clear resistances, but any of the highs of the candles could act as resistance. Although, the most important resistance could be the 200 week exponential moving average, around the 0.7382 level.

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Euro, three days in free fall

On the daily chart of the EUR/USD we can see that the price has been dropping from the 1.1200 level during the last three days and it is reaching the 1.1000 level, completing a 200 pip drop. The price may try to stall or bounce back to the upside from the 1.1000 level, but if it does, then the 1.1100 level could act as resistance. Above the 1.1100 level, the price may be returning to the congestion area around the 1.1200 level. We must keep in mind that the bearish trend is still in place and the price may break below the 1.1000 level. In case the price breaks below the 1.1000 level, then it may try to go and visit the 1.0952 level.