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DXY logged 3rd consecutive down day and the index closed the session at 94.11, which sits below 20 days moving average. This is first bearish signal and DXY can be sold from the current levels. The stops should be placed just above 95.20 resistance and targets at 92.80.
Gold took off. The yellow metal traded as low as 1237 today, bounced off and staged a impressive rally closing the day at 1252 – the highest in 4 sessions. Today’s daily bar engulfed 3 previous days giving the beginning of a larger move upwards. We can expect the downtrend to pause and reverse.
Gold reach expected low at 1241.00. This is a major support level for this market and given very oversold conditions, GLD is likely to bounce off this level and trade a little higher. I would expect the upside will not be aggressive and GLD will be moving sideways to up a lot in the next two months. I don’t see any particular setups in the price action for the moment. It looks like the consolidation is about to take place.
The price of gold is declining for the third week in a row. The XAU / USD develops a downward movement below the strong resistance levels 1299.00 (EMA200 on the daily chart), 1277.00 (Fibonacci level 61.8% of the correction to the wave of decline since July 2016), 1274.00 (EMA200 on the weekly chart). Against the backdrop of expectations of further tightening of the Fed’s monetary policy, it is likely that the XAU / USD will fall further with the immediate target at the support level of 1248.00 (50% Fibonacci level).
EURUSD traded higher in today’s session. It was 3rd consecutive day of gain after the pair formed a key reversal off the support at 1.1535. The price has now closed above 20 days moving average and it is likely to continue higher from here. I have entered a long position as follows:
EURUSD bounced off the support. Today’s candle engulfed the previous session, which is a bullish signal. Given the support held up strong, we could see EURUSD rally from these levels in the next few weeks. The first bullish confirmation will be a close above 20 moving average. Until then the price must be assumed bullish.
EURUSD held the support for another day and closed the session at 1.1570. The price action is becoming oversold and the narrow range at the support suggests there is no seller coming in to push the price down. This might still play out though. Short positions can be entered at the break of 1.1530. If the price moves below it, it can trend much lower from there. Only the break and close above 1.1700 will suggest more upside.
The Cable finally broke below the recent low at 1.3240 and it is closing the session at 1.3170. This market is likely to continue lower from here. The resistance lies at 1.3250 and it provides a perfect entry for any short trades. Only a break above 1.3400 would invalidate bearish outlook. The Cable is a sell on rallies until further notice
EURUSD rebounded from the 1.1540 and closed the Monday’s session at 1.1628. I expect some retracement upwards and another leg down to the fresh lows. 1.1700 would be a good place to sell EURUSD. Stops should be placed just above 1.1860. A clear break of 1.1860 would invalidate short outlook and the price will probable move higher. So far the short trade off 1.1700 is plausible.
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