Possible consolidation on the Dollar Index

The Dollar Index has kept a very good bearish trend, but once it got to the 93.00 level, the index tries to stall its drop there as shown on the daily chart. The Dollar Index bounces from the 93.00 level to the 94.00 where the 200 week EMA is precisely at that level. Even though the bearish trend is still in place, there is a possibility of the 200 week EMA acting as a resistance and the index may consolidate between the 93.00 level and the 94.00 level. On the other hand, if the weakness persists on the Dollar, then the instrument may break below the 93.00 level to go and visit the 92.00 level. The stochastics indicator is trying to come out of the oversold area, showing us that the index may try to correct to the upside. If the Dollar Index breaks above the 94.00 level, then the next resistances could be the 95.00 level or the 96.00 level where the 55 day EMA is very close to that zone. 

61.8% Fibo retracement on gold

Gold goes back to its bullish trend during today’s session while the Dollar continues dropping after the FED’s statement. The 55 day EMA, purple line, has acted as a good support on gold and from that level the price of the precious metal bounced to the upside and reaches the 61.8% Fibonacci retracement around the 1260 level. Gold has also broken above its 200 week EMA at the 1254 level. The 61.8% Fibo may act as a resistance, but a breakout may take the price of gold to the 1274 level where we can find the 76.4% Fibo. Above the 76.4% Fibo, the next important resistance on gold is at the 1300 zone. A bearish bounce from the 61.8% Fibo may cause the price of gold to fall to the 55 day EMA and 200 day EMA zone, around the 1242 level. The 200 day EMA may has a good probability of acting as a support.

WTI oil breaks its 200 day EMA

WTI oil has broken during today’s session above the 48.00 level and above the 200 day EMA as shown on the daily chart. Oil accelerates its bullish momentum after Saudi Arabia announced that it will cut its crude production. WTI oil rallies 3.3% and reaches a high of more than a month ago to reach a daily peak at the 48.64 level. Even though WTI oil has broken above its 200 day EMA, the zone may still act as a resistance and the price may try to pullback from there. In case of a pullback, The 47.00 level may act as a support, but if oil goes back to its bearish trend, any of the round number levels all the way to the 42.00 zone may act as support. To the upside, if the rally continues, then the next resistance level may be the 50.00 level. 

The USD/CAD is stuck on the 200 week EMA

The US Dollar versus the Canadian Dollar has fallen to a very important support zone around the 1.2500 level as we can see on the weekly chart. The Greenback has been pressured to the downside lately by all the internal issues in the United States, while the Canadian Dollar has been supported by the recent rally on oil. On the weekly chart of the USD/CAD we can see that the 1.2500 zone has already acted as a support in the past and it may very well act again as a support, especially when the 200 week EMA is exactly at that level. The 200 period EMA usually acts as a good support or resistance zone, especially on the higher time frames like the weekly chart. If the USD/CAD manages to bounce to the upside from the 200 week EMA, then it could go and visit the 1.3000 level, which could act as a resistance. If the pair breaks to the downside, then the 1.2300 zone could act as its next support.

Drop on the Dollar persists

The Dollar index has closed the week to the downside, dropping below the 200 week exponential moving average and below the 94.00 level as shown on the weekly chart. The stochastics indicator is below the 20% line and stays in the oversold zone. The Dollar index may continue dropping during the next week, but due to the fact that the stochastics indicator is below the 20% line, the indicator may consolidate in that zone, because it cannot drop below the 0% level. The instrument is clearly over-extended to the downside and it may correct or pullback at any moment, but if it continues dropping, then its next support levels could be the 93.00 level or the 91.88 level. The more it drops, the higher the probabilities of seeing a bullish pullback. To the upside, in case of a retracement, its next resistance levels could be any of the round number zones like the 95, 96, 97, or 98 levels. 

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Is the AUD/USD in overbought zone?

The AUD/USD has been having a very good rally starting last week when the US Dollar started falling. The Australian Dollar has also gotten support from the Reserve Bank of Australia’s minutes, where the central bank is showing a heighten optimism over the Australian economy. Additionally, the upbeat fundamental data out of China has raised the optimism on the Australian markets due to the fact that China is the main trading pattern of Australia. On the daily chart of the AUD/USD we can see that the pair has broken above the 0.7700 level and accelerates its rally until it broke above the 0.7800 level. Since last Monday the pair has rally again and breaks above the 0.7900 level to come very close to the 0.7986 level where we can find the 200 week EMA. The Stochastics indicator is showing us that the pair is in overbought zone and it could be getting ready to make a retracement or correction. The angle of inclination and separation of the 55 day EMA (purple line) and the 200 day EMA (blue line) is also showing us that the pair is over-extended to the upside and probably ready for a pullback.