Will silver change its trend?

Silver has been falling steadily since it made a double top pattern around the 18.63 zone as shown on the daily chart. Silver has been falling along with gold, but the drop has been caused mostly by a slowdown in the Chinese economy, which has hurt basically the whole commodity sector. The drop on silver from the 18.63 level can also be seen on the MACD indicator, which is still showing a bearish trend, but the histogram’s bars are getting smaller than the previous ones and that is a sign that the trend is losing its strength. On the daily candles we can also see a weakening of the trend as the last few candles have a doji or spinning top formation, indicating that the commodity is undecided at the moment. The price of silver has come very close to the 16.00 zone, which could act as support and from where it may try to bounce to the upside. In case the price bounces to the upside, its next resistance could be the 16.76 level. To the downside, its next support could be the 15.00 level.

The USD/JPY nears its 76.4% Fibo

The Fibonacci retracement levels that have the highest probability of acting as support or resistance are the 61.8% and the 76.4%. When the price of an asset retraces a 61.8% of a drop or a rally, it usually stalls at that level and tries to change its direction, but if it breaks that zone and continues with its main trend, it will probably reach the 76.4% Fibo and at that zone it may change its trend. However, we must have in mind that the price may even break all of those levels, just as it does at any support or resistance zone. On the daily chart of the USD/JPY we can see that the pair suffered a strong drop from the 115.50 level to the 108.00 zone. From the 108.00 zone the pair starts to retrace to the upside as the Dollar gains ground versus the Yen amid a rise in risk appetite. Once it got to the 61.8% Fibo at the 112.67 level, the bullish momentum stalls momentarily, but then it continues rising. At the moment the pair is trying to visit the 76.4% Fibo at the 113.76 level and it is possible for that level to act as resistance.

Hammer formation on oil

WTI oil accelerates its bearish momentum at the beginning of today’s session and drops very fast to the 44.00 zone after breaking below the 47.00 level during yesterday’s session as shown on the daily chart. After touching the 44.00 level, the price of WTI oil bounces suddenly to the upside and reaches the 45.42 level, forming what it appears to be a hammer pattern. The hammer is a bullish reversal Japanese candlestick pattern that forms when there is a fast drop in the price of the asset and then a bounce to the upside during the same period of time that the candle is measuring. Once the price goes back up, it comes very close to the same level where the candle opened, indicating that there is indecision in the market. But the long lower shadow that is left on the candle is showing us that the bulls have taken control of the market and are trying to take the price higher. If the following candle is bullish, then the pattern is confirmed and most likely we will see a change in direction. In case the price of WTI oil keeps pulling back to the upside, then the 47.00 level may act as a resistance. To the downside, if the price goes back down, the 44.00 level may act as support.

Gold breaks the 200 day EMA to the downside

Gold has kept a very good bearish trend since it started retracing to the downside from the high at the 1295 level, very close to the 1300 zone. The price of gold breaks below the 200 week EMA at the 1256 level and from there the bearish momentum accelerates even more to take the precious metal below the 200 day EMA at the 1239 level. The drop has been so strong that the price of gold has broken during today´s session below the 61.8% Fibonacci retracement of the rally from the low at the 1200 zone to the high at the 1300 zone. From this point on, gold may continue falling and it is possible for it to go and visit the 76.4% Fibo at the 1218 level. Below the 76.4% Fibo, its next important support is at the 1200 zone. Since the commodity is clearly over-extended to the downside, there could be a bullish pullback, maybe towards the 200 day EMA, but the 200 week EMA at the 1256 level, which coincides with the 38.2% Fibo may act as a better resistance.

Oil retraces 100%

WTI oil remains very weak as shown on the daily chart and it has retraced 100% or it has made a parabolic retracement as it is also known to the 47.00 zone. The 47.00 zone may act as support for oil, but in case it breaks it, the bearish momentum may accelerate even more and WTI oil may reach the 44.78 level or the 44.00 level where it may find some support. To the upside, the 200 day EMA (blue line) at the 49.52 level could act as resistance along with the 50.00 level. Above the 50.00 level, any of the round number levels all the way to the 54.00 level may act as resistance, but the most important resistance is at the 55.20 level. The crude oil inventories data out of the US has shown a small reduction in the production of oil, but it has not been enough to cause the price of WTI oil to stop falling.

Gold continues retracing

Gold has been falling during the las few weeks as shown on the daily chart and drops below its 200 week EMA around the 1256 level. The bearish momentum accelerates below the 200 week EMA and at the moment it is getting closer to the 200 day EMA around the 1239 level. The 200 day EMA could act as a support for gold and its price may try to bounce to the upside from there. However the zone between the 200 week EMA at the 1256 level and the 200 day EMA at the 1239 level has been a congestion area in the past, therefore, it is possible for the price of gold to stay stuck in this zone, oscillating back and forth without taking a clear direction. In case gold breaks below the 200 day EMA then the commodity may have the road clear to go and visit the 1200 level, where we can see on the chart that the price made a double bottom formation causing it to stall there. To the upside, the most relevant resistance zone is at the 1300 level, where it has made its most recent high.

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.