Decisive level for the Dollar Index

The Dollar has been hit hard by its main counterparts, especially by the Euro and the Pound, which have continued with their bullish trend during today’s session. On the weekly chart of the Dollar Index we can see that the index has fallen to the 91.00 level, zone which already acted as support in mid-August of last year. If the index manages to bounce to the upside, it could be forming a double top pattern, which is a bullish reversal formation, but in order for the pattern to be confirmed, the index must first break above the 95.00 level. Before reaching the 95.00 level, the index may find some resistance on its 200 day EMA around the 94.00 level. Due to the fact that this is a weekly chart, the analysis would have to be considered for the mid or longer term. In case of a breakdown below the 91.00 level, the index may fall to the 89.35 level.

The Dollar Index comes back down

The Dollar Index is losing ground again and falls below the 92.00 level as shown on the daily chart. If the index continues falling, then it may reach the 91.00 level which could act as support. The Dollar Index is composed primarily of the Euro and that is why during today’s rally on the single currency, the Dollar Index has fallen. The Euro rose on expectations that the European Central Bank may start reducing its economic stimulus. On the other hand, the index may stay consolidating around the 92.00 level or it may try to go back up towards the 93.00 level. The 55 day EMA along with the 93.00 level may act as resistance.

Possible bearish breakdown on the Pound

The GBP/USD has found a good resistance zone at the 1.3600 level from where it bounced to the downside to the 1.3500 level and forms what it appears to be a bullish flag on the daily chart. The price of the GBP/USD has been really consolidating between those two levels without taking a clear direction. However, during the last trading sessions, the candles have been bearish and the price has tried to break below the 1.3500 level. If the GBP/USD breaks below the 1.3500 level, then it could visit the 1.3400 level where we can also find the 55 day EMA. To the upside, the 1.3600 level could still act as resistance, but a breakout of that level could take the pair to the 1.3700 level.

Breakout-pullback on silver

The breakout-pullback pattern is formed when the price of an asset breaks an important support or resistance level and then pulls back to it to bounce back in the direction of the initial breakout. On the daily chart of silver we can see that the price has been a very good bullish trend from the low that it made at the 15.59 level. Once the price got to the 200 day EMA, blue line, it breaks above that moving average, but it finds some resistance around the 17.00 level. The price continued rising until the 17.26 level to pull back to the 200 day EMA. Now the 200 day EMA may become a support and if the price bounces from that level to the upside, then the breakout-pullback pattern will be completed. To the upside, the high at the 17.45 level may act as resistance.

Symmetrical triangle on gold

While the Dollar was losing ground, gold got strengthen and managed to break decisively above the 1300 Dollars per ounce. On the daily chart of the precious metal we can see that the price made a high around the 1326 level and consolidated from there. Inside the consolidation a symmetrical triangle was formed. The symmetrical triangle is a continuation pattern, therefore there is a higher probability of seeing the price of gold heading higher, due to the fact that the trend coming into the formation is bullish. But the price may break in any direction and a bearish breakout is also possible. Above the 1326 level its next resistance could be the 1357 zone, where gold made a high on September of last year. Below the 1300 level, the 200 day EMA, which is currently around the 1272 level, could act as support.

First trading week for the euro is directionless

The EUR/USD has started the first week of the year practically consolidated between the 1.2000 level and the 1.2100 level as shown on the daily chat. Inside the consolidation we can see that the price has formed what it appears to be a bullish flag or a symmetrical triangles. Due to the fact that the trend coming into the consolidation is bullish, there is a higher probability of seeing a breakout to the upside. The MACD indicator is showing us that the bullish trend is still in place, but it looks like it is losing its strength, therefore we could see a bearish breakdown below the 1.2000 level. Below the 1.2000 level its next support could be the 1.1900 level. Until the price breaks away from the consolidation there is no real direction on the EUR/USD at the moment.

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