The Dollar regains some ground

The Dollar Index has managed to break above its 200 month EMA around the 89.35 level and rallies above the 90.00 level as shown on the daily chart. The last two sessions have been very quiet, but the index may try to continue higher. In case of a bullish continuation, the 91.00 level along with the 55 day EMA (purple line) could act as a resistance. The 92 and 93 round number levels could also act as resistances, but in order for the index to reverse its trend to the upside, it must break above the 200 day EMA (blue line). Regardless of the current pullback, the bearish trend is still in place and there is a possibility of the index coming back below the 89.35 level, but the 88.24 level could act as a support.

Change of direction to the downside on the Pound?

The GBP/USD has formed what it appears to be a double top formation around the 1.4300 level, which normally acts as a bearish reversal pattern. The price of the pair has fallen to the 1.3900 level and the last daily candle has a relatively long upper shadow with a small real body, which is an indication that the bears took control of the market towards the end of the session. The price of the GBP/USD may continue falling, but the 55 day EMA around the 1.3749 level could act as support. Below that moving average, the 1.3600 level could also act as support. To the upside, any of the round number levels could act as resistance, but a better resistance could be the 1.4300 level and in order for the pair to go back to its bullish trend it must break above the 1.4400 level.

Gold pressured by the Dollar’s rally

Gold was enjoying a very good bullish trend until it got to the 1366 level as shown on the daily chart, while the Dollar was weakening. However, the Greenback gains ground versus its main counterparts and pressures the price of gold to the downside. This is due to the fact that gold is quoted in Dollars in the international markets and when the Dollar rises, the demand for the precious metal decreases. From the 1366 level gold starts to pull back to the downside until it reaches the 55 day EMA around the 1312 level. It is possible for that moving average to act as support, especially when the last daily candle is in the shape of a doji which means indecision in the market. On the other hand, if the price breaks below the 55 day EMA, then the 1300 level could act as support.

Pullback to a key level on the EUR/USD

The EUR/USD has been very volatile lately, but it has not taken a clear a direction. The pair has been consolidating between the 1.2300 level and the 1.2500 level. In order for the EUR/USD to take a clear direction, it must break one of those levels either to the upside or to the downside. On the most recent pullback, the price came to the 1.2300 level where we can find the 200 month EMA and from there it bounced to the upside as shown on the daily chart. For the pair to keep its bullish trend, which is still in place as indicated by the angle of inclination that the 55 day EMA is showing, it must break above the 1.2500 level. Below the 1.2300 level, its next support levels could be the 1.2200 level along with the 55 day EMA.

Good pullback on the Dollar

Amid the strong drops that we saw on the main stock indexes in Europe and the US, the Dollar managed to rally versus its main counterparts and pulls back to the upside as shown on the daily chart. In one hand, the Dollar keeps its bearish trend and the 55 day EMA (purple line) is trying to cross below the 200 day EMA (blue line), which is an indication that the drop may continue if the cross is completed. For now the 88.24 level may act as support and the 90.00 as resistance. On the other hand, the monthly chart is showing us that the instrument may have completed a fake breakout below the 200 month EMA and the Dollar index may try to go back up in the midterm.

Gold prone to a correction

Gold had been climbing on the back of a weaker Dollar. The precious metal reached a high around the 1366 level as shown on the weekly chart. From the high at the 1366 level, the price of gold has been retracing or pulling back. If the next weekly candle is also bearish, then gold may drop to the 1300 level, which on the other hand, could act as a support. Below the 1300 level, the next support could be the 55 week EMA around the 1279 level. To the upside, the zone between the 1366 level and the 1375 level could act as resistance in case the price goes back up. 

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