Technical Analysis 05-04-2017
By Antonis Vasloos
The euro has declined sharply over the past week, a period characterized by renewed strength in the U.S. dollar following last month’s swing low. The EUR/USD is down nearly 200 pips from last week’s high. Prices were last seen hovering at 1.0677, virtually unchanged from the previous close.
The euro continues to trade near the lower Bollinger Band, a region typically characterized as bearish. However, it remains within a well defined trading range, reflecting continued trepidation in the market.
The British pound extended losses on Tuesday, as prices carved out a range just above a key technical support. The outlook is largely bearish following a sharp downward move below the 20-day and 50-day simple moving averages. Price action on both indicators is trending lower.
The GBP/USD exchange rate was last seen hovering at 1.2440, little changed from its previous close. Prices have rebounded from oversold levels but remain exposed to further downside risk.
Crude oil rose to fresh three-week highs on Tuesday, as traders resisted the urge to take profits after last week’s impressive rally. Prices closed above the 20-day and 50-day simple moving averages on Tuesday, and were last up 0.6% overnight. A lower ATR reading signals relatively weaker volatility for crude prices in the short term.
Despite the latest rally, WTI is trading more than 6% below its February swing high.
Gold prices rose to fresh one-week highs Tuesday, hitting a familiar resistance near the 61.8% Fibonacci retracement. The 61.8% Fib has been a major barrier for bullion since mid-February. A failure to extend the rally in the coming days could expose the contract to a sharp reversal toward the 50% retracement.
Bullion is likely to remain rangebound for the time being. Prices were last seen trading just above $1,255.00 a troy ounce.