Technical Analysis 08-02-2017
By Antonis Vasloos
The euro trended firmly lower against the dollar on Tuesday, offering further evidence of negative pressure on the pair. The EUR/USD reached a key support area during the intraday, which appears to have stalled the downtrend. The pair was last seen trading at 1.06744.
The EUR/USD remains firmly supported above 1.0600, a level it has successfully defended for most of 2017. The outlook remains neutral, based on the RSI and MACD, although the market faces greater downside risk emanating from a firming U.S. dollar.
- Support (daily): 1.0639, 1.0597, 1.0541
- Resistance (daily): 1.0737, 1.0793, 1.0836
The British pound resumed its consolidation pattern on Tuesday, settling above 1.2500 U.S. following three consecutive daily losses. The GBP/USD has declined around 160 pips from the February 2 settlement high of 1.2661 that resulted from the pair’s biggest one-day gain in several years.
At the time of writing, prices remain below the 100-day EMA. Price action has weakened over the past week, with the 20-day EMA no longer on an upward slope. Short-term oscillators indicate the market remains firmly supported within the current range. This suggests the outlook remains neutral, although buyers will be disappointed around the daily resistance level (near 1.2600).
- Support (daily): 1.2387, 1.2264, 1.2184
- Resistance (daily): 1.2590, 1.2670, 1.2793
The outlook on crude oil turned bearish on Tuesday, as prices plunged toward three-week lows. West Texas Intermediate (WTI) futures continued lower Wednesday morning, falling 57 cents, or 1.1%, to $51.60 a barrel. The contract is trading more than 4% below its 2017 settlement high of $53.99. Several failed attempts to break that level suggest crude prices are in a short-term downtrend.
WTI faces immediate support at $51.28, the 100-day simple moving average. It has lost significant momentum in recent days, with relative strength falling toward 40. This indicates further downward pressure on crude in the short term.
- Support (daily): $51.28, $50.74, $49.84
- Resistance (daily): $53.07, $53.96, $54.68
Gold logged its fourth consecutive advance on Tuesday, reaching its highest level in three months. Bullion was trading at $1,234.90 a troy ounce at the time of writing, having gained more than 3% since the start of February. The April futures contract has seen a surge in buying interest over the last several weeks, as evidenced by the rise in net long positions.
The yellow metal is approaching overbought territory on the Relative Strength Index (RSI), while the MACD remains firmly in positive territory. This suggests a slight pullback or consolidation may be in order, although the underlying trend supports continued upside over the medium term.
- Support (daily): $1,229.74, $1,225.27, $1,222.04
- Resistance (daily): $1,237.44, $1,240.67, $1,245.14