EUR/GBP: Visits the 200 day EMA

The Euro versus the Pound has had a very good bearish momentum since it started dropping on Wednesday when it made a high on the 0.8735 zone. During today’s session the Euro has been losing ground versus its main counterparts, including the Dollar and the Pound, but the drop has been more pronounced versus the Pound, not only because of weakness on the Single Currency, but on the fact that the Pound has been gaining a lot of strength. At the moment, the EUR/GBP has reached its 200 day EMA (blue line), around the 0.8516 level. We may find some entry opportunities on the EUR/GBP around the 200 day EMA, either on a breakdown or a bounce from that moving average. If the pair bounces from the 200 day EMA, then it could try to go and visit the 0.8600 level, which acted as a support in the past, but now may act as a resistance. In case the pair breaks to the downside, then it will practically have the road clear to drop all the way to its latest low at the 0.8400 zone.

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Trend reversal on the Euro?

The Euro versus the Dollar has been falling steadily during the last few trading sessions since it started falling from the 1.0900 zone. At the 1.0900 level we can see the formation of a candlestick shooting star pattern, which is confirmed as shown on the daily chart by the two bearish candles following the formation. Therefore, it is possible for the pair to continue falling, maybe towards the 1.0700 level, which could act as support. Once the pair breaks below the 1.0800 level and below the 200 day EMA (blue line), the bearish momentum accelerates and we could see a trend reversal if the MACD line (green line) crosses below its signal line (red line). On the MACD indicator we can also see that the histogram’s bars are getting smaller, which is an indication that the bullish trend is losing its strength. To the upside, if the EUR/USD goes back above the 1.0800 level, then its next resistance level could be the high that it made on the 1.0900 zone. 

Possible double top on gold

On the weekly chart of gold we can see that the price of the precious metal has come back to its 200 week EMA (blue line), around the 1258.23 level. If the price bounces from the level to the downside, then a double top pattern may form, which is a bearish reversal pattern. In order for the double top formation to confirm itself, the price must break below the 1200.00 level, but we can see that the level has acted as a very good support in the past and it may stall the price there once again in case it falls to that zone. Below the 1200.00 level, the next support level could be the 1180.11, followed by the low that it did at the 1122.02 level. To the upside, in case the price breaks above the 1263.51 level, the next resistance could be the 1300.00 level, followed by the 1336.95 level and finally by the high at the 1375.14 level.

The GBP/USD reaches the 1.2600 level

The Pound versus the Dollar has shown a trend reversal to the upside which has been sustained since it started rallying from the 1.2100 zone to the 1.2600 zone. The pair made a consolidation around the 1.2400 zone and then at the 1.2500 zone. From the 1.2500 level, the GBP/USD gains enough bullish momentum to reach the 1.2600 level. In case the pair breaks above the 1.2600 level, it may reach the 1.2700 zone where we can also find the 200 day EMA, blue line. The 1.2700 zone could act as a very good resistance as it did at the beginning of February. In case the pair retraces to the downside, then the first support could be found at the 1.2500 level, followed by the 1.2400 level. For now the fundamental data and the geopolitical events may continue hurting the dollar; therefore, there is a good chance that the pair may continue heading higher.

Technical levels on the NZD/USD

Technical analysis can be applied to any financial instrument that has an opening level, a high, a low, and a close. However, some instrument are more technical than others and react in a predictable way around the technical levels. In the case of the NZD/USD, we can see that it has recently made some reversals around key technical zones. On the daily chart of the Kiwi we can see that the pair started rising from the psychological and round number level of the 0.6900 at the end of last year to reach a high at the 0.7373 to then go back down 100% to the 0.6900 level at the beginning of March. Just when it got to the 0.6900 level, it made a double bottom formation there to change direction to the upside. The bullish momentum accelerates and the NZD/USD reaches the 200 day EMA zona, which is around the 0.7091 level from where it bounces to the downside to reach another round number level at the 0.7000. Once it reached the 0.7000 level during today’s session, it forms a hammer pattern on the daily candles, which is a bullish reversal formation and it is possible for the price to reach the 200 day EMA again for next week. But if the pair breaks below the 0.7000 level, then it may very easily go and visit the 0.6900 level again.

Will the EUR/USD break above its 200 day EMA?

The Euro versus the Dollar has been in a very good bullish trend, which has taken it to the 1.0800 zone where it coincides with the 200 day EMA (blue line), but it is currently trying to stall its trend at that level. On the daily chart we can see that the pair has been having difficulties in trying to break above the 1.0800 level, but at the same time it has neither been able to break above the 200 day EMA. The last time that the EUR/USD broke above the 200 day EMA was on November 9^th of last year and even then the breakout was temporary, because once the pair got to the 1.1300 level, it bounced from that level to the downside. On the current visit that the pair is making to the 200 day EMA, it may try to bounce to the downside and maybe reach the low at the 1.0493 level. To the upside, in case of a bullish breakout, any of the round number levels from the 1.0900 to the 1.1300 may act as resistance.