Gold close to a support zone

Gold has pulling back down while the Dollar is gaining ground versus its main counterparts. The negative correlation between gold and the Dollar has taken the price of the precious metal very close to its 55 day EMA at the 1319 level. The price of gold has already bounced to the upside from the 55 day EMA in the past and this time the zone could also act as resistance. In order for gold to go back to its bullish trend, the price must break above the high at the 1366 level, otherwise the price may just consolidate between the 55 day EMA and the 1366 level. Below the 55 day EMA, its next support zone could be the area between the 1300 level and the 200 day EMA at the 1288 level.

The USD/CAD in a possible congestion zone

On the daily chart of the USD/CAD we can see that the pair has been consolidating between the 55 day EMA at the 1.2538 level and the 200 day EMA at the 1.2681 level. It is not unusual to see the price of an instrument consolidate between those two moving averages without taking a clear direction. The price of the USD/CAD may actually break in any direction, but for now the most probable price action is sideways. The stochastics indicator is showing us that the bullish momentum has come back and the USD/CAD may try to break above its 200 day EMA. In case of a bullish breakout, the USD/CAD may find its next resistance at the high on the 1.2920 level. In case the pair breaks below the 55 day EMA, then its next support could be the zone between the 1.2300 level and the 1.2244 level.

Possible hammer on the USD/JPY

On the daily chart of the USD/JPY we can see that the actual daily candle has formed what it appears to be a hammer formation. The hammer is a bullish reversal pattern that is confirmed when the next candle is also bullish. The formation of the candle with its long lower shadow is indicating that the buyers have taken control of the market. If the next candle is bullish, then that is showing us that the buyers may still be in control of the market and the pair may pull back to the 108.00 level, zone that may act as resistance. The pair is clearly over-extended to the downside and that is high there is good probability of watching the USD/JPY make a correction, but the bearish trend is still in place. For now, the 109.00 level may continue acting as support.

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Gold at the 76.4% Fibo

Among the Fibonacci retracement levels, the 76.4% is the one that has the highest probability of acting as a support or resistance. On the daily chart of gold we can see that the price of the precious metal has made an excellent bullish bounce from the 1307 zone and the 55 day EMA. The price has now reached the 76.4% Fibonacci retracement and it is not unusual to see the price stalling at this zone. In case of a bearish bounce, the price of gold could fall to the 55 day EMA again or the 1300 level could also act as a support. To the upside, in case the price continues rallying, the high at the 1366 level could act as resistance. That is in the technical side, but on the fundamental views, the Dollar must continue falling in order for gold to keep rising. In case the Dollar strengthens again versus its main counterparts, gold could pull back to the downside.

Resistance on copper?

As the Dollar retraces to the downside and the optimism rises on the global economic growth, the prices of copper come back to the upside as shown on the daily chart. However, during today’s session copper reached its 55 day EMA (purple line) at the 315.63 level where it stalls its rally. The 55 day EMA may possibly act as a resistance on copper, but the stochastics indicator is trying to come out of the oversold area above the 20% and that is an indication that the price may continue higher. In case copper breaks above the 55 day EMA, it may try to reach the 330.66 level where the 200 month EMA is sitting. On the other hand, if we do see a bounce to the downside from the 55 day EMA, the price of copper may drop to the 200 day EMA (blue line) around the 298.32 level. Another possible scenario is that copper may stay consolidated between the 55 day EMA and the 200 day EMA without taking a clear direction.

Good support on the Dollar

After having broken above the 90.00 level, the Dollar index has found a good support level at that zone. Actually, on the daily chart we can see that the index has formed what it appears to be a breakout-pullback pattern on that zone. The Dollar index may probably bounce to the upside from the 90.00 level and maybe try to visit the 91.00 level where we can also find the 55 day EMA (purple line). The 91.00 level could act as resistance, but if the index manages to break that level to the upside, we could possibly see a bullish trend reversal. The 92.00 and the 93.00 levels could also act as resistances, but a most relevant resistance could be the 200 day EMA (blue line). To the downside, the index could possibly consolidate around the 89.35 level, but it could find a good support around the low of the 88.24 level.