Gold retraces to the 200 week EMA

During the last three weeks gold has been retracing to the downside, since it made a high around the 1295 level, very close to the 1300 level. On the weekly chart we can see that gold has retraced to its 200 week EMA, which in the past it has acted as a resistance and now it could act as a support. The 200 period EMA usually acts as a very good support or resistance level, especially on the higher timeframes. Now that the price has broken above the 200 week EMA and it has come back to it, a breakout and pullback pattern may be developing around that zone. If the price of gold bounces to the upside from the 200 week EMA (blue line) around the 1256 level, then the breakout and pullback pattern may be completed and gold may try to go and visit again the 1300 zone. If the price breaks below the 200 week EMA, then it will practically have the road clear to go and visit the 1200 level in the midterm, but which could act as support.

The GBP/USD continues rallying

The rally on the GBP/USD continues and it is getting closer to the 1.3000 level as shown on the daily chart. However, we must keep in mind that on the 1.3000 level we also have the 55 week EMA, which may contribute to making that zone a good resistance area from where the price may bounce to the downside. The bullish trend is gaining strength as shown by the angle of inclination of the 55 day EMA (purple line). There is a high probability of seeing a visit of the GBP/USD to the 1.3000 level during next week, but we must also be attentive to a bearish bounce from that level, because it could give us an opportunity to open a position. On the other hand, if the pair breaks above the 1.3000 level, then it may try to go and visit the 1.3100 zone. To the downside, in case of a bearish pullback, the most relevant support levels are the 1.2800 zone and the 1.2700 zone.

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The GBP/USD on resistance zone

The GBP/USD rises to the 1.2900 zone, but it has not been able to confirm a breakout above that level as we can see on the daily chart. Even so, the bullish trend is still in place and the pair may try to break above the 1.2900 level to go and visit the 1.3000 level. The 1.3000 level has a great chance of acting as a resistance, due to the fact that exactly at that level we can find the 200 week EMA, which may contribute to causing the price to bounce to the downside from there. Over the daily chart we can see that the 55 day EMA (purple line) is pointing to the upside, indicating that the bullish trend is gaining strength. If the 55 day EMA crosses above the 200 day EMA (blue line), then we will have a golden cross, which is a pattern that has bullish implications in the midterm. To the downside, in case of a bearish pullback, the main support zones are the 1.2800 level and the 1.2700 level where we can find the 200 day EMA.

Cotton at an important resistance zone

Cotton has been in a very sustainable bullish trend since the beginning of last year as we can see on the weekly chart of the July contract. The 55 week EMA (purple line) has crossed above the 200 week EMA (blue line), confirming a golden cross, which has bullish implications in the longer term. Therefore, the price of cotton may continue higher, even though it may try to stall at the 80.00 level, which could act as resistance. The current weekly candle has the shape of a “hammer” with a long lower shadow, which is showing us that the bulls have taken control of the market and may try to take the price higher, maybe above the 80.00 level. If the price breaks above the 80.00 level, then its next resistance may be the 85.00 level. In case the price of cotton retraces to the downside, then the 73.29 level may act as support, followed by the 200 week EMA at the 69.00 level.

Bullish flag on the GBP/USD

The GBP/USD has lost its bullish momentum during that last few sessions and it is currently consolidating around the 1.2800 zone, forming what it appears to be a bullish flag or a pennant as shown on the daily chart. From this point on, the pair may head in any direction, but there is a higher probability of seeing a bullish breakout since the trend coming into the formation is bullish. The 55 day EMA (purple line) has changed its direction to the upside, confirming a bullish trend. The GBP/USD would need to break above the 1.2900 level to keep its bullish trend, but the 1.3000 level could act as a resistance along with the 55 week EMA which is currently exactly at that level. To the downside, the nearest support area is the 1.2700 zone along with the 200 day EMA (blue line), but a much relevant support could be the 1.2600 level.

The EUR/USD retraces but keeps its bullish trend

The EUR/USD has made a very good bearish retracement from the 200 day EMA around the 1.0770 level, which has taken it below the 1.0700 level. None the less, the MACD indicator over the daily chart is showing us that the bullish trend is still in place. If the pair continues falling, then it may reach the 1.0600 level, which has acted as a support in the past. Below the 1.0600 level, its next support could be the 1.0500 level, a very psychological zone where the pair has had difficulties in continuing lower. However, the Euro is very sensitive at the moment over the French presidential elections and it could show high volatility depending on the outcome of the voting. In the best case scenario for the Euro, it may even break above the 1.1200 level in the mid-term. In the worst case scenario, it may break below parity at the 1.0000 level. To the upside, the 1.0800 level may act as a resistance, but above that level, the most important resistance is the high that it made around the 1.0900 zone.