Conflicting signals on silver

On the daily chart of silver we can see that the price had sustained a bearish trend from the 18.63 level to the 16.00 zone. From the 16.00 zone, silver started retracing to the upside during the last couple of weeks and gets to the 17.00 level where it has stalled its correction. The MACD indicator is showing us that the bearish trend has changed to the upside, but on the other hand, the price of silver is bouncing from the 17.00 level to the downside. Therefore, we have conflicting signals on the daily chart of silver, because on top of that, the 55 day EMA (purple line) has crossed below the 200 day EMA (blue line), confirming a “death cross” signal which has bearish implication in the midterm. The MACD indicator may be signaling a change of trend to the upside, but in order to confirm a real bullish trend, the price of silver must break above the 200 day EMA or above the 17.50 level. A continuation of the bearish trend must be confirmed with a breakdown of the 16.00 level.  

Oil goes back up

WTI oil has gone back up during today’s session after the US crude oil inventories came out lower during six weeks in a row, taking the price of WTI to the 200 day EMA (blue line) at the 49.35 level as shown on the daily chart. The 200 day EMA zone has been a hard to break resistance zone lately and coupled with the 55 day EMA (purple line), WTI oil could bounce to the downside from there. A little bit above the 55 day EMA we can see the 50.00 level, which in case of a breakout of those two moving averages could also act as resistance. Above the 50.00 level, any of the round number levels from the 51.00 to the 54.00 could also act as resistance. To the downside, the most relevant support is at the 48.00 level, but the 47.00, the 46.00 or the low at the 44.00 level could also act as support. If the 55 day EMA crosses below the 200 day EMA, then we could be having a “death cross” formation, which in the midterm has bearish implication for the instrument.

The EUR/JPY reaches the 200 week EMA

The 200 period exponential moving average usually acts as a very good support or resistance zone, especially on the higher time frames. That is why now that the EUR/JPY has reached its 200 week EMA at the 125.46 level, it is possible for that moving average to act as a resistance. The uptrend on the pair has been steady and today it accelerates even more after the economic growth data out of the Eurozone is showing that the economy is apparently out of the doldrums and heading higher. The probability that the European Central Bank will terminate its bond purchasing program is rising and that has supported the Euro versus its main counterparts. If the EUR/JPY bounces to the downside from the 200 week EMA, then the 123.00 level or the 122.00 level may act as support. Above the 200 week EMA, the next resistance level on the weekly chart is all the way at the 128.21 level.

Breakout and pullback pattern on gold

On the daily chart of gold we saw the other day that the price had fallen steadily until it broke below the 200 day EMA (blue line) around the 1238 level and reached the 76.4% Fibonacci retracement zone, which acted as a support. When the price bounced from the 76.4% Fibo to the upside, it came back to the 200 day EMA and completed what it is known as a breakout and pullback pattern. Exactly from the 200 day EMA, gold bounces back to the downside and if the following daily candles are bearish, then the price of gold may go back to the 76.4% Fibo, which may act once again as support. Below the 76.4% Fibo, its next support is at the 1200 area. Above the 76.4% Fibo, its next resistance could be the 200 week EMA at the 1256 zone. In order for gold to continue higher, risk aversion needs to come back into the markets, but for now it may just try to confirm the breakout and pullback pattern and maybe continue lower if risk appetite rises again.

The Dollar Index pulls back

On the daily chart of the Dollar Index we can see that the instrument has pulled back beneath the 200 day EMA, blue line, around the 99.28 level. The previous candle is in the shape of a shooting star, which is a bearish reversal pattern. If the following candle is also bearish, then the index may continue falling maybe trying to visit the 98.41 level, which could act as support. Next week we don’t have a lot of fundamental data out of the US, but movements on the Euro or the Pound may influence the Dollar Index. Another possible scenario is that the index may stay consolidated around the 200 day EMA without taking a clear direction. To the upside, the index may try to go and visit the 100.00 level, but a much better resistance could be the 101.51 zone, followed by the high at the 102.16 level.

Seminar: Skill Development and Mindset Training

ActivTrades is providing a free seminar in London on May 13, 2017 at the Radisson Blu Edwardian Hampshire Hotel, 31-36 Leicester Square, London, WC2H 7LH. The event will be conducted by professional experts of the financial markets like: Dr. Andrew Lumsden-Groom, Zak Mir, Jenny Hammond, Stephen Hoad, and many other experienced speakers that will be explaining many of the psychological aspects of trading and how to manage them to be a successful trader. This is an excellent event with very valuable information that is hardly given free of charge by other institutions. ActivTrades is always trying to improve the trading abilities of its clients by providing high quality educational programs. To register for the event, please visit the following link:

https://www.activtrades.com/en/seminars

Don’t miss this great opportunity to acquire the essential tools to manage your emotions properly and keep your loses in check while letting your profits rise.

The Dollar Index goes back up

The Dollar Index breaks again above the 200 day EMA (blue line) at the 99.28 level and tries to regain its bullish momentum. If the index continues rallying, its next resistance zone could be the high that it made at the 101.25 level. Another possible scenario is that the index could go a little bit higher to then come back to the 200 day EMA and form what it is known as a pullback and reverse pattern, where the 200 day EMA could act as a support and the index could continue heading higher. However, we must keep in mind that the 200 day EMA is very horizontal, which means that the instrument could enter into a consolidation around that zone, without taking a clear direction unless something extraordinary happens with the US fundamental data. If the Dollar Index breaks below the 200 day EMA, its first support level could be the 98.41 zone, followed by the 98.00 round number level. Below the 98.00 level, the index practically has the road clear to drop all the way to the 96.00 level.