Consolidation on orange juice

The price of the orange juice contract for November has gotten into a consolidation as shown on the weekly chart, around the 154.73 level where we can also find the 200 week EMA and the 55 week EMA. On the consolidation a pennant or triangle has been formed and due to the fact that the MACD indicator is still showing a bullish trend, it is possible to see the price breaking to the upside. In order for a bullish breakout to be confirmed, the price must overcome the 164.55 level. If there is a real breakout of the 164.55 level, then the price of orange juice would have the road clear all the way to the 189.00 zone, level which already acted as resistance in the past. To the downside, the most important support levels are at the 140.00 level or the low at the 125.00 level.

Pullback on copper could have been over

The price action on copper has been caused by the economic indicators in China. The rally that the commodity had to the 317.84 level, the pullback to the 55 day EMA, and the following rise to the 325.86 level have been the result of a variety of fundamental data out of the Asian Giant. Whatever happens in China directly affects the price of copper due to the fact that China is the main consumer of commodities and the industrial metal. From the last peak that copper reached at the 325.86 level, there was a bearish pullback that took it to the 317.84 zone, which acted as a support and that it was resistance in the past. Apparently, the bearish pullback that copper had to the 317.84 zone is over and the price may try to bounce back up, but in order to keep its bullish trend, it must break above the 325.86 level. The angle of inclination of the 55 day EMA (purple line) is telling us that the bullish trend is still in place, but if the copper keeps falling, that same moving average may act as support. The 200 day EMA may also act as support, but at the moment is too far away.

Possible bearish continuation on gold

Gold bounces to the downside from the 1300 zone as shown on the weekly chart and it may try to reach the 1260 level where we can find the 200 week EMA and the 55 week EMA exactly at the same level. The price of gold has already bounced to the upside from the 1260 zone, therefore we could see another bullish bounce from that area in case the price falls to that zone. On the other hand, if gold breaks below the 1260 level, then it may have the road clear to fall all the way to the low at the 1204 level or the 1200 level. The 1300 level may still act as a resistance to the upside, but another possible scenario is that the 55 week EMA (purple line) may cross above the 200 week EMA (blue line) and form what it is known as a “golden cross”, which has bullish implication in the mid-term. A breakout above the 1300 level may take the price of gold all the way up to the peak at the 1357 level.

Risk aversion supports the Yen

The main stock market indices around the world are in the red. Risk aversion has come back into the markets with a vengeance after the disappointing earnings reports of some of the corporations in the United States and Europe. Additionally, the Chinese economy seems to be deaccelerating and that has pressured the emerging markets and the main Asian indices to the downside. As the risk aversion rises, the traders and investors find refuge in the Yen and other safe-haven assets like gold. That is why we see a strong drop on the USD/JPY during today´s session, due to the fact that the Yen is que quote currency on the pair.  However, despite today’s drop, the USD/JPY is still boxed between the 113.00 level and the 112.00 level. The 55 day exponential moving average is still above the 200 day exponential moving average, which is an indication that the pair keeps a slight bullish trend. Besides the aforementioned, the USD/JPY has already visited in different occasions the 113.00 level and the more times the pair visits that level, the higher the probabilities of breaking it to the upside. To the downside, the most relevant support level is at the 200 day EMA, around the 111.23 level.

Resistance becomes support on copper

In technical analysis we can see on many occasions that a support level may become resistance or resistance may become support. That happens mostly because of psychological reasons. On the daily chart of copper we can see that the commodity was having a good bullish trend until it reached the 317.84 level from where it bounces to the downside. On the bearish bounce from the 317.84, the level is labeled as a resistance. The price then falls to the 55 day EMA (purple line) from where it goes back up. When the price goes back to the 317.84 level, at that zone some traders open short positions believing that the level was going to act as resistance once more, but the bullish momentum was so strong that the price continued higher until it reached the 325.86 level. The short positions enter negative territory, but when the price retraces to the downside and visits the 317.84 level again, those short positions go back to breakeven and the sellers feel relieved, rushing to close those short positions before the price goes back up. That is why that zone becomes support and the price may try to bounce back up from there. However, in order for the bullish trend to be sustained, the price of copper must break above the high at the 325.86 level. In case the price keeps dropping, then its next most relevant support is at the 55 day EMA, around the 298.97 level.

Silver is pressured to the downside

Silver falls during two sessions in a row after reaching a high around the 17.44 level as shown on the daily chart. The drop on silver coincides with the drop on gold after the rally on the Dollar and a rise of risk appetite. Precious metals are often used as safe haven instruments and that is why they rise on risk aversion and fall on risk appetite. Silver made a high on the 18.19 level after a very good rally, but recently it has been oscillating around the 200 day EMA. Today the price of silver falls below the 200 day EMA and below the 17.00 level. However, the 17.00 zone may act as support and silver may bounce to the 17.44 level. A breakout above the 17.44 level could take silver back to the peak at the 18.19 level. On the other hand, if silver breaks below the 17.00 level, its most relevant support could be the 16.29 level followed by the 16.00 level.

Uncertainty around Brexit stalls the rally on the GBP/USD

The GBP/USD was in a good bullish pullback from the 1.3000 zone as shown on the daily chart until it got to the 1.3300 zone where it stalls its rally. The probability that the Bank of England may raise its interest rates has been diminished by the uncertainty surrounding the Brexit negotiations. That is why during today’s session we can see that the GBP/USD has bounced to the downside from the 1.3300 zone. However, the 1.3200 level may act as a support, especially when we can see the 55 day EMA around that level. Below the 1.3200 level its next support could be the 1.3000 level where we can also find the 200 day EMA very close to that zone. To the upside, in case the pair breaks above the 1.3300 level, its next resistance may be the 1.3500 level, followed by the highs that it made around the 1.3600 level.