The GBP/JPY is trapped between EMAs

The moving averages could act as levels of resistance or support and in certain occasions the price of an instrument may get trapped between two moving averages, bouncing from one to the other. On the daily chart of the GBP/JPY we can see that the price of the pair has been stuck between the 200 day EMA (blue line) and the 55 day EMA (purple line). The range between the two EMAs goes from the 141.74 to the 143.00. When that ranges is wide enough, one could trade inside it, buying at the support and selling at the resistance. However, if the range is too tight or if one doesn´t want to take any chances by getting caught on the wrong side of the market in case of a breakout, we can wait for a breakout before taking a position. If the price breaks to the upside, then the next resistance level above the 143.00 zone is the 145.00 level. Below the 200 day EMA or the 141.74 level, the next support levels could be the 140.00 level followed by the 139.00 level.

The NZD/USD is still overbought

The stochastics indicator is usually used as an overbought or oversold indicator. However, it has its weak spots like when the price of the underlying asset stays in a sustainable trend, while the indicator is trapped between the 100% and the 0%. On the daily chart of the NZD/USD we can see just that; while the price of the pair has kept a very good bullish trend, the indicator has gone above the 80% line, but it is not able to keep rising above the 100%, especially if the price of the NZD/USD breaks above the 0.7100 level. In case of a breakout, the next resistance on the pair is at the 0.7200 level. In case of a bearish bounce from the 0.7100 zone, its closest support is at the 200 day EMA (blue line) at the 0.7034 level. In theory, the price of the asset may continue rising indefinitely, but not the stochastics indicator and that is the weak spot that the indicator has. The stochastic indicator works well in a trending market, but it stops working when the trend is kept for a long time. Below the 200 day EMA, the NZD/USD has practically the road clear to drop all the way to the 0.6900 zone.

The GBP/JPY bounces from the 143.00 level

On the daily chart of the GBP/JPY we can see that the pair has been retracing downwards in an orderly fashion since it started dropping from the 148.09 zone. Every time the pair makes a new low, it consolidates for a while to then accelerate its bearish momentum and make a lower low. When the pair broke below the 143.00 level and below the 55 day EMA (purple line), it consolidated during a day to pull back to the 143.00 level and its 55 day EMA to bounce to the downside from there. If the price continues dropping, then it may reach the 200 day EMA (blue line) at the 141.74 level where it may stall. But if the GBP/JPY manages to break below the 200 day EMA, then its closest support is at the 140.00 level followed by the 139.00 level. Below the 139.00 level, the pair practically has the road clear to visit the low at the 135.58 zone from where it started rising. Above the 143.00 level, its most important resistance is at the 145.00 level followed by the 146.00 level and the 147.00 level, but its most relevant resistance is at the high at the 148.09 zone from where it started falling.

The GBP/USD retraces to the 55 day EMA

The GBP/USD plummets during today’s session, pressured to the downside by strength in the US Dollar and the possibility that the upcoming UK general elections could turn very tight for the Conservative Party of the Prime Minister, Theresa May. The GP/USD drops to the 1.2800 zone where we can find the 55 day exponential moving average (purple line) or the 55 day EMA. The confluence of the 1.2800 round number level and the moving average could make this zone a very good support for the GBP/USD. Therefore, it is possible to see a bullish bounce from this area. If the pair bounces to the upside, then it may try to go and visit the 1.2900 level, which could become a resistance. To the downside we can find some levels that could also act as supports in case the pair continues dropping. For instance, the 200 day EMA (blue line), around the 1.2738 level could be its closest support, followed by the 1.2700 level. But a level that could act as a better support is the 1.2600 level, due to the fact that the zone acted as a resistance in the past and now could change its function to a support.

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The NZD/USD is struggling with the 200 day EMA

The New Zealand Dollar versus the US Dollar has had a good bullish trend that has taken it to the 200 day exponential moving average or 200 day EMA, around the 0.7034 level as shown on the daily chart. Usually, the 200 period EMA acts as a good support or resistance zone, especially on the higher timeframes and that is why we can see that the NZD/USD is having difficulty in breaking above that level with sufficient force. The stochastics indicator is showing us that the pair is over-extended to the upside and there is a good probability of seeing a bearish bounce. Therefore, the NZD/USD could bounce to the downside from the 200 day EMA zone. In case of a bearish bounce, its next support level could be the 0.6900 area, followed by the low that it made around the 0.6817 zone. On the other hand, the more time the pair spends around the 200 day EMA, the higher the probabilities of seeing a bullish breakout. If the price breaks to the upside, then the next resistance level could be at the 0.7100 zone.

Possible symmetrical triangle on gold

Gold had a good rally last week while the Dollar was weakening, but once it got to the 200 week exponential moving average zone, it stalls there and the bullish momentum dries down while the price consolidates around the 1256 level. The 200 week EMA zone at the 1256 level coincides with the 50% Fibonacci retracement of the fall that it suffered from the 1295 level to the 1214 level. On the daily chart we can see that the current consolidation has formed what it appears to be a symmetrical triangle. Due to the fact that the trend coming into the formation is bullish, there is a higher probability of seeing a bullish breakout, but the price of gold may actually breakout in any direction. In case of a bullish breakout, the next resistance level on gold is at the 76.4% Fibo around the 1276 level. Above the 1276 level, the next resistance is at the high that it made at the 1295 level from where it started falling. To the downside, in case of a bearish breakdown, the next support level is at the 200 day exponential moving average around the 1238 level. Below the 200 day EMA, its next support is at the low of the 1214 level from where it started retracing to the upside.