The EUR/USD breaks above the 1.1800 level

The Euro versus the Dollar has reached levels that it has not visited since January 2015 and breaks above the 1.1800 level. The probabilities of the European Central Bank changing its monetary policy and starts to raise its interest rates are getting higher every day. On the weekly chart of the EUR/USD we can see that the rally on the pair has been steady and accelerates even more when the price broke above the 200 week exponential moving average (EMA) around the 1.1600 level. The pair is clearly over-extended to the upside, but it may continue rallying. If the pair keeps rising, its next resistance level could be the 1.2000 level, due to the fact that the zone is a very important round number area, but the 1.1900 level could also act as resistance. In case of a bearish pullback, the 1.1600 level where we can find the 200 week EMA may act as a support.

Oil gains bullish momentum

After the WTI Oil broke above the 48.00 level and above the 200 day EMA, the commodity has been rising in an orderly fashion until coming very close to the 50.00 level as shown on the daily chart. The 50.00 level could act as resistance and the price of WTI oil could bounce to the downside from that zone. In case of a bearish bounce from the 50.00 level, the WTI could form a breakout and pullback pattern on the 200 day EMA. On the other hand, a breakout of the 50.00 level, could take the price to the 51.00 level or the 52.00 level. The 52.00 level could act as a resistance, but a better resistance could be the 53.00 level. If the price of WTI oil manages to break below the 48.00 level, any of the round number levels from the 47.00 to the 42.00 level could act as support.

Possible consolidation on the Dollar Index

The Dollar Index has kept a very good bearish trend, but once it got to the 93.00 level, the index tries to stall its drop there as shown on the daily chart. The Dollar Index bounces from the 93.00 level to the 94.00 where the 200 week EMA is precisely at that level. Even though the bearish trend is still in place, there is a possibility of the 200 week EMA acting as a resistance and the index may consolidate between the 93.00 level and the 94.00 level. On the other hand, if the weakness persists on the Dollar, then the instrument may break below the 93.00 level to go and visit the 92.00 level. The stochastics indicator is trying to come out of the oversold area, showing us that the index may try to correct to the upside. If the Dollar Index breaks above the 94.00 level, then the next resistances could be the 95.00 level or the 96.00 level where the 55 day EMA is very close to that zone. 

61.8% Fibo retracement on gold

Gold goes back to its bullish trend during today’s session while the Dollar continues dropping after the FED’s statement. The 55 day EMA, purple line, has acted as a good support on gold and from that level the price of the precious metal bounced to the upside and reaches the 61.8% Fibonacci retracement around the 1260 level. Gold has also broken above its 200 week EMA at the 1254 level. The 61.8% Fibo may act as a resistance, but a breakout may take the price of gold to the 1274 level where we can find the 76.4% Fibo. Above the 76.4% Fibo, the next important resistance on gold is at the 1300 zone. A bearish bounce from the 61.8% Fibo may cause the price of gold to fall to the 55 day EMA and 200 day EMA zone, around the 1242 level. The 200 day EMA may has a good probability of acting as a support.

WTI oil breaks its 200 day EMA

WTI oil has broken during today’s session above the 48.00 level and above the 200 day EMA as shown on the daily chart. Oil accelerates its bullish momentum after Saudi Arabia announced that it will cut its crude production. WTI oil rallies 3.3% and reaches a high of more than a month ago to reach a daily peak at the 48.64 level. Even though WTI oil has broken above its 200 day EMA, the zone may still act as a resistance and the price may try to pullback from there. In case of a pullback, The 47.00 level may act as a support, but if oil goes back to its bearish trend, any of the round number levels all the way to the 42.00 zone may act as support. To the upside, if the rally continues, then the next resistance level may be the 50.00 level. 

The USD/CAD is stuck on the 200 week EMA

The US Dollar versus the Canadian Dollar has fallen to a very important support zone around the 1.2500 level as we can see on the weekly chart. The Greenback has been pressured to the downside lately by all the internal issues in the United States, while the Canadian Dollar has been supported by the recent rally on oil. On the weekly chart of the USD/CAD we can see that the 1.2500 zone has already acted as a support in the past and it may very well act again as a support, especially when the 200 week EMA is exactly at that level. The 200 period EMA usually acts as a good support or resistance zone, especially on the higher time frames like the weekly chart. If the USD/CAD manages to bounce to the upside from the 200 week EMA, then it could go and visit the 1.3000 level, which could act as a resistance. If the pair breaks to the downside, then the 1.2300 zone could act as its next support.

Drop on the Dollar persists

The Dollar index has closed the week to the downside, dropping below the 200 week exponential moving average and below the 94.00 level as shown on the weekly chart. The stochastics indicator is below the 20% line and stays in the oversold zone. The Dollar index may continue dropping during the next week, but due to the fact that the stochastics indicator is below the 20% line, the indicator may consolidate in that zone, because it cannot drop below the 0% level. The instrument is clearly over-extended to the downside and it may correct or pullback at any moment, but if it continues dropping, then its next support levels could be the 93.00 level or the 91.88 level. The more it drops, the higher the probabilities of seeing a bullish pullback. To the upside, in case of a retracement, its next resistance levels could be any of the round number zones like the 95, 96, 97, or 98 levels.