Excellent rally on gold

Risk aversion has caused a flight to safety and that is why we have seen strong rallies on gold and other safe haven assets. The precious metal has broken above the high on the 1274 level as shown on the daily chart and it is getting closer to the high at the 1281 level. The rally may continue even above those levels if risk continues to rise in the international financial markets or if the US Dollar goes back to its bearish trend due to the inverse relationship that there is between the greenback and gold. Above the 1281 level, the next resistances could be the high at the 1295 level, but a better resistance zone could be the 1300 level. To the downside, the 200 week EMA at the 1254 level could act as support and below that level the 200 day EMA at the 1244 level could also act as support. Another possible scenario that may develop is a consolidation between the 1274 level and the 1281 level.

The GBP/USD breaks below the 1.3000 level

The GBP/USD keeps its bearish retracement due to weakness on the Pound and a comeback on the US Dollar. The Pound drops after the weak consumer spending data in the United Kingdom, which falls for a third month in a row. Investors and traders have doubts about the UK economy, while in the US the jobs openings reading came out better than expected, supporting the Dollar and the NFP numbers from last Friday. On the daily chart of the GBP/USD we can see that the pair has fallen below the 1.3000 level and reaches the 55 day exponential moving average (purple line) where it is trying to stall momentarily. In case of a bullish bounce, the 1.3100 level or the 1.3200 level could act as resistance, but for now the fundamental data is pointing to a possible bearish continuation. If the pair continues dropping, then the 1.2900 level could act as support, along with the 200 day EMA (blue line) or the 1.2800 level.

Breakdown of the 0.7400 level on the NZD/USD

The NZD/USD managed to find a good support zone at the 0.7400 level as shown on the daily chart and the pair formed what it appears to be a head and shoulders pattern. The 0.7400 level has acted as its neckline, but the pair breaks below that zone during today’s session. The US Dollar has been gaining strength versus its main counterparts after the NFP numbers out of the US came out better than expected. Therefore, the NZD/USD may try to continue falling. In case of a bearish continuation, the pair may find some support around the 55 day exponential moving average (purple line), which is currently just above the 0.7300 level. In case of a breakdown below the 0.7300 level, the NZD/USD may find a better support at the 0.7200 level, which has already acted as a good support in the past. The 200 day EMA (blue line) may also act as a support. To the upside, the most important resistance levels are the 0.7500 zone and the high at the 0.7559 level.

NFP numbers support a bullish close on the Dollar

Today we had the Non-Farm Payrolls (NFP) numbers out of the US, which came out better than expected, causing an amazing comeback on the Dollar Index. The US economy was expected to have created 182K new jobs during the month of July, but the reading came out at 209K new jobs. The unemployment rate dropped from 4.4% to 4.3% and the average hourly earnings rose by 0.3%. The data was more than excellent and it was exactly what the Dollar needed to change its direction versus its main counterparts. On the daily chart of the Dollar Index we can see that the instrument broke above the 93.00 level and it may try to continue rising towards the 94.00 level. The stochastics indicator is trying to come out of the oversold zone at the 20% level and if it does, then there could be a trend reversal on the index. The 94.00 level could act as a resistance, followed by the 95.00 or the 55 day EMA (purple line). To the downside, the 92.00 level could still act as a support in case of a bearish continuation on the Dollar Index.

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What level could be the next resistance on the EUR/USD?

The EUR/USD seems unstoppable. The pair has reached the 1.1900 zone and keeps its bullish trend as shown on the weekly chart. The EUR/USD has broken above the 55 week EMA around the 1.0900 level and above the 200 week EMA around the 1.1600 level. From this point there are no more relevant resistance on sight, but any of the round number levels like the 1.1900 or the 1.2000 levels could act as resistance. The 1.2000 level has a high probability of acting as resistance due to the fact that it is a psychological level. The higher an instrument rises, the higher the probabilities of it correcting to the downside. Therefore, we could see a pullback on the EUR/USD at any moment. The possibility of the European Central Bank adjusting its monetary policy has kept the Euro rising, but the day that the rumors become real, we could see a retracement on the Single Currency on the back of a profit taking spree.

Gold visits the 76.4% Fibo

The weakness on the US Dollar has supported the rally on gold taking the precious metal to the 76.4% Fibonacci retracement of the drop that it had from the 1295 level on June 6^th to the 1204 level on July 10^th as shown on the daily chart. The price of gold has tried to stall its rally at some of the most relevant resistance levels like the 200 day EMA at the 1243 level, the 200 week EMA at the 1254 level, and the 61.8% Fibo at the 1261 level. At the moment, the 76.4% Fibo at the 1274 level could act as resistance, but the lower shadow of the current daily candle is showing us that the bulls are still in control of the market. Therefore, the price of gold could possibly break above the 76.4% Fibo and maybe try to reach the high at the 1295 level or the 1300 round number level. To the downside, the most important support could be the 200 week EMA at the 1254 level.