How low may the Pound drop?

On the 4 hour chart of the GBP/USD we can see that the price has broken below the 200 week EMA at the 1.4041 level and below the 200 period EMA on the 4 hour chart at the 1.4000 level. The pair has dropped very close to the 55 day EMA at the 1.3957 level. This whole area is clearly a very good support zone due to the confluence of moving averages on different time frames like the weekly, daily, and 4 hour charts. Even if the price of the GBP/USD keeps dropping, the 1.3900 level may act as support. To the upside, the most relevant resistance level is at the 1.4100 zone, followed by the 1.4200 level.

Indecision and volatility on copper

On the daily chart of copper we can see that the price has been oscillating around its 200 day EMA (blue line), without taking a clear direction, but very volatile at times. This Wednesday’s daily candle has a long lower shadow, which is an indication that the buyers came into the market towards the end of the session. Therefore, during this Thursday’s session the price of the metal may go back up, but the 55 day EMA (purple line) at the 310.99 level may act as resistance. In order for the copper to go back to its bullish trend, the price must break above the 310.99 level and even above the 325.00 level. At the 330.66 level we can find the 200 month EMA, making that zone the most relevant resistance for copper. To the downside, the 55 week EMA at the 294.25 level is its closest support level and below that moving average, the 200 week EMA at the 279.77 level may also act as support.

The Dollar index consolidates

On the daily chart of the Dollar index we can see that the instrument has consolidate during the last four trading sessions just below the 90.00 level and the 55 day EMA. The bearish trend seems to stay in place, but the index has actually no clear trend at the moment. The 89.35 level continues acting as a very good support zone, due to the fact that at that level we can find the 200 month EMA, but the real support is at the low of the 88.14 level. To the upside, in case of a bullish breakout the momentum may accelerate to the upside and the index may rally to the 91.00 level or even the 92.00 level, but the 200 day EMA (blue line), may also act as a resistance.

The GBP/USD tries to go back up

The GBP/USD has been slowly getting higher from the 1.4000 zone, but it has not been able to break above the 1.4100 level. Regardless of the bearish correction during last week, the GBP/USD keeps a bullish trend in the short term and its 55 day EMA has been holding the price to the upside. But on the other hand, the 1.4041 level and the 1.4300 level have been acting as good resistances due to the fact that we can find the 200 week EMA at the 1.4041 level and the 55 month EMA at the 1.4300 level. A breakout above the 1.4100 level could take the GBP/USD to the 1.4200 or the 1.4300 level. To the downside, the 55 day EMA may act as support, but also the 1.3900 and the 1.3700 levels could act as support. In reality, the most relevant support is at the 1.3600 level where we can also find the 200 day EMA.

Will the weakness continue on the Dow Jones?

The Dow Jones has been pressured to the downside, primarily by the actions of Donald Trump. First, the US president imposed additional tariffs on steel and aluminum imports that included China and other Chinese products. That caused the stock market to drop. Secondly, Trump started to criticize the way Amazon uses the US Postal Service to deliver its products and that also caused the stock market to fall, not only in the US, but in Europe and Asia as well. On the daily chart of the Dow Jones we can see that the index has found a good support around the 200 day EMA (blue line) as it did at the beginning of February. Now the index has tested the 200 day EMA approximately five times and that is a sign that the instrument may continue dropping. To the downside, the next support level could be the 23000 and to the upside, the 25000 may act as support, given a bullish breakout of the 24000 level.

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Support on Gold?

The bearish momentum accelerates on gold as shown on the daily chart and the price falls exactly to the 55 day EMA (purple line), around the 1324 level. The US Dollar rallied strongly during today’s session and that has pressured the price of gold to the downside, due to the negative correlation between the Greenback and the precious metal. At the current level, the price of gold may either bounce to the upside from the 55 day EMA or break that moving average to the downside to continue falling to the 1300 zone. In case of a bearish breakdown, the 1300 area along with the 200 day EMA (blue line) could act as support. Below the 200 day EMA, gold has the road clear to fall all the way down to the 1238 zone. In case of a bullish bounce from the 55 day EMA, gold may find some resistance around the 1350 level. Above the 1350 level, its next resistance is still the peak at the 1366 level.