Bullish breakout on the WTI oil

WTI oil has been supported during today’s session by a rise in risk aversion and optimism in the stock market. Usually, when stocks rise, oil tends to rise as well, due to the fact that the market is anticipating an economic expansion that will need fuel to stay up and running. The change in sentiment of the markets comes after the Chinese president announced that it will open its markets and it will reduce the tariffs on car imports. That has caused the price of oil to rally as shown on the daily chart of the WTI oil. On the chart we can see that when the bullish momentum accelerated, the price of WTI oil breaks above the bearish trendline and above the 64.00 level. The bullish momentum was so strong that the price continued to break above the 65.00 level and reach a high around the 65.84 level. The next resistance on the commodity could be the 66.64 zone from where the price has already bounced to the downside. In case of a bearish pullback, the first support zone could be the 64.00 level, followed by the 55 day EMA, which is currently around the 62.49 level.

Pay attention to the bullish momentum on the Pound

The GBP/USD has broken above the 1.4100 level as shown on the daily chart and the bullish momentum has taken the pair to a high around the 1.4164 level. The long upper shadow on the last candle indicates a bearish interest towards the end of the trading session. However, the pair may continue rallying and it could reach the 1.4200 level, which could act as resistance. A better resistances though is at the 1.4300 level where we can find the 55 month EMA. Since we don’t know for sure where the price may bounce to the downside, we could use a money management strategy where we enter with half of the usual lot at one level and then if the price keeps heading higher, we enter with the other half and average the position. To the downside, the 1.4000 zone is still a congestion area.

Slight bearish trend on the EUR/USD

The EUR/USD is keeping a slight bearish inclination as shown on the daily chart and it has managed to break below the 1.2300 level and the 55 day EMA (purple line). Exactly at the 1.2300 level we can find the 200 month EMA, therefore the price of the EUR/USD has also broken that moving average to the downside. The breakdown took the price of the EUR/USD close to the 1.2200 zone from where it bounces to the upside and finds resistance around the 1.2300 level. Support has become resistance for now at the 1.2300 zone. To the upside, the most important resistances could be the 1.2400 level and the 1.2500 level. To the downside, the most relevant support right now is the 1.2200 level, followed by the 1.2100 level and finally the 1.2000 level where we can also find the 200 day EMA (blue line).

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.