Amazing drop on the WTI oil

WTI oil has been retracing to the downside from the 54.00 zone as shown on the daily chart and accelerates its bearish momentum once it broke below the 52.00 level. The drop on oil comes with a slowdown in the demand of crude, according to the latest US data. The drop has taken the commodity very close to the 50.00 level, which together with the 200 day EMA (blue line) at the 49.64 level could act as support. Below the 200 day EMA, the next support is on the 47.00 level where it made its most recent low. To the upside, the next resistances could come at the 52.00 level, the 53.00 level or the most important resistance at the 54.00 level.

The EUR/USD bounces from the 200 day EMA

The EUR/USD has a good rally that took the pair to the 200 day EMA round the 1.0770 level and which gave a trend reversal signal on the MACD over the daily chart. The rally was caused in part to the weak fundamental data out of the US and the rally on the Pound which at the same time helped to push the Single Currency higher. From the 200 day EMA the pair bounce to the downside and comes close to the 1.0700 level. In case the EUR/USD breaks below the 1.0700 level, it will have the road clear to drop to the 1.0600 level, a zone that has acted as a good support in the past. Above the 200 day EMA, its closest resistance is the 1.0800 level, but a break out above the 1.0800 level could take the price to the high at the 1.0900 level.

The Dollar Index stalls its drop

The Dollar Index has suffered a great drop after the US fundamental data came out worse than expected and after the enthusiasm over the economic stimulus that Donald Trump has been promising dissipated. The drop on the Greenback exacerbated even more when the Pound started rallying after the UK’s prime minister said that she was going to call for general elections in June. On the daily chart of the Dollar Index we can see that once the index came to the 200 day EMA (blue line) around the 99.36 level, it stalled there and it is currently trying to pull back up from there. But in order for the index to go back to its bullish trend, it must break above the high that it made around the 101.25 level. To the downside, in case the index breaks below the 200 day EMA, its next support area could be the low that it made around the 98.66 level.

Gold retraces while the Dollar gains ground

Gold and the Dollar normally have a negative correlation due to the fact that gold is quoted in US Dollars in the international markets and when the Dollar rises, the demand for gold falls causing its price to drop as well. The recent drop on the Dollar and the rise in risk aversion has kept the precious metal in an uptrend until it reached a high around the 1295 level, very close to the 1300 level. Today, US Treasury Secretary, Steven Mnuchin has said that in the long term the strength of the US Dollar is a good thing due to its role as a global reserve currency. This has caused the Greenback to rally while gold retraces to the downside. On the daily chart of gold we can see that below today’s low at the 1284 level, its next support could be the 200 week EMA around the 1256 level. To the upside, in case the price of gold breaks above the 1300 level, it will practically have the road clear all the way to the high that it made around the 1336 level.

WTI oil retraces, but keeps its bullish trend

WTI oil has had a very good bullish trend from the 47.00 level as shown on the daily chart. Oil has been benefiting from recent events, like the production cuts from OPEC and the geopolitical tensions in the Middle East. As tensions rise in Syria, it is possible that production and distribution on oil from the region may be disrupted. The rise in WTI oil has taken the price near to the 54.00 level, but during the last few sessions it has started retracing to the downside. However, regardless of the retracement, the bullish trend is still in place. If the price breaks below the 53.00 level, then the 52.00 may act as support. In case the price goes back up above the 53.00 level, then the WTI oil may try to reach the 54.00 level. 

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“Death Cross” on the EUR/JPY

The death cross is formed when the 55 day EMA (purple line) crosses below the 200 day EMA (blue line). It is called the death cross, because it has bearish implications for the instrument in the mid-term. The cross is not considered an entry signal, because normally when the cross is confirmed, the instrument is already over-extended to the downside and ready for a possible bullish pullback or retracement. None the less, the cross lets traders know that the bearish trend may continue in the mid-term, regardless if there is a pullback or not. On the daily chart of the EUR/JPY we can see that a death cross has been confirmed and we may see a breakdown of the 116.00 level. The pair may try to reach the 115.00 level, especially if the risk aversion in the markets continues and the Yen keeps rallying versus its main counterparts. But if the pair bounces to the upside, then its first resistance zone may be the 117.00 level, followed by the 118.00 level or the 119.00 level.