Again resistance on the USD/JPY?

Earnings season has begun and along with it risk appetite has come back to the markets amid optimism on positive corporate results. The safe haven assets have lost ground due to investors looking for higher returns. That is why the USD/JPY has been rallying for the past two sessions and reaches the 111.39 level from where it has bounced to the downside in the past. If the pair bounces to the downside from the 111.39 level, then it would be forming a double top pattern on that zone. On the other hand, the valleys on the daily chart have been higher than the previous ones, indicating that the bullish pressure is accumulating at the 111.39 level. A breakout above the 111.39 level could take the USD/JPY to the 113.00 level. To the downside, the 110.00 level could act as support along with the 55 and 200 day EMAs just below that level.

High volatility on the GBP/JPY

On the daily chart of the GBP/JPY we can see that this Monday’s session was very volatile, but indecisive. The long shadows in both directions on today’s daily candle is telling us that the pair tried to break above the 55 day EMA (purple line), but at the same time it tried to bounce from that moving average to the downside. At the end of the session, the real body of the candle closed around the opening and that is an indecision signal around the 146.91. To the upside, the 200 day EMA (blue line) at the 148.16 level could act as resistance. Above that moving average, its next resistance could be the 151.00 level. To the downside, the low at the 143.20 level could act as support.

Important resistance on the EUR/JPY

On the weekly chart of the EUR/JPY we can see that the instrument had a very good bullish trend from the 115.00 zone to the 137.51 zone, before retracing to the downside. On the daily chart of the EUR/JPY the trend seems to be bearish, but in reality it is not a bearish trend, but rather a correction of the main bullish trend on the weekly chart. Therefore, we could see the pair head back up in the longer term. However, at the moment the EUR/JPY has found a very good resistance at the 55 week EMA (purple line), around the 129.84 level. Since the bullish bounce from the 125.00 level to the upside, the pair has consolidated between the 200 week EMA at the 127.87 level and the 55 week EMA. Around the current level we can see a bearish trend line (red line), which could act as resistance, but a breakout of that resistance could take the pair to the 133.00 zone. To the downside, in case of a breakdown below the 200 week EMA, its next support could be the low at the 125.00 level.

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Possible hammer formation on the NZD/USD

The hammer is a bullish reversal Japanese candlestick pattern. On the weekly chart of the NZD/USD we can see that the price fell to the 0.6700 level and bounces to the upside, leaving behind a hammer formation. On the daily chart of the Kiwi at the left hand side of the image we can see that the price has been falling from the 55 day EMA to the 0.6700 level and forms what it appears to be a double bottom formation. Both, the hammer and the double bottom patterns are bullish reversal patterns. Therefore, we have a high probability of seeing the NZD/USD retracing to the upside. Above the 0.6800 level, its next resistance could be the 0.6900 level, but the 0.7000 level could also act as resistance. On the other hand, if the price continues dropping, then the pair may reach the 0.6600 level.

Oil tries to break resistance

The bullish pressure on WTI oil is accumulating around the 74.45, where the price finds a good resistance. However, the bullish trend in the short term is still in place, therefore the price may continue rising. On the daily chart of WTI Oil we can see that 10 out of the last 12 daily candles have been bullish and that is an indication that the bullish trend is strong. The instrument is clearly overextended to the upside, but if it continues rallying, then the 77.00 level could act as resistance, due to the fact that in that zone we can find the 200 month EMA. On the other hand, if the price bounces to the downside, then the 70.00 level or the 68.00 level could act as support. Another possible scenario is that the price of WTI oil may consolidate between the 73.00 level and the 75.00 level until new fundamental data comes in to the markets and makes it take a more clear direction.

Possible bullish continuation on WTI oil

WTI oil has had a very good bullish trend, even though OPEC has been thinking about raising its production output. It seems like the shortage may continue to support oil prices and on the weekly chart of WTI oil on the right side of the image we can see that the instrument has been rising for two weeks now. At the 74.44 level, WTI oil has found a good resistance zone, but the price may continue higher especially now that the golden cross has been confirmed on the weekly chart. The gold cross is when the 55 period EMA crosses above the 200 period EMA and it has bullish implications in the midterm. Therefore, if the price of WTI oil breaks above the 74.44 level, then it may reach the 77.00 level where we can find the 200 month EMA and which may act as resistance. To the downside, the 68.00 level or the 62.00 level may act as support. Another possible scenario is that the price may consolidate between the 74.44 level and the 72.00 level without taking a clear direction.