Technical Analysis 10-03-2017
Outlook: Slightly Bearish
The EUR/USD snapped back on Thursday, but gains were limited by a short-term resistance located at the upper Bollinger band. The pair faces an inflection point at the upper Bollinger level around 1.0615, based on the 1-hour chart. The ATR is relatively low, signaling lower trading volatility in the euro.
The euro has been in a downtrend all weak, a trend that may continue in the short-term as the dollar seeks greater divergence with its major trading peers.
The British pound is plumbing new lows against the dollar, as the GBP/USD continues to pullback from a late-February swing high near 1.2600. The pair was last seen trading at 1.2160, having declined more than 100 pips during the week. A clean break below 1.2100 exposes the January 16 settlement low of 1.2039 as the next target.
The bearish formation is confirmed by the ADX, which currently shows an absent or weak trend. This makes trend trading relatively obsolete in the short-term.
Crude oil slipped below $50 a barrel on Thursday for the first time since December. In the process, the contract fell below a major confluence of support. U.S. West Texas Intermediate (WTI) futures was last seen trading at $49.62 a barrel. Prior to the latest decline, prices had traded comfortably between $51.00 and $54.00 since November.
WTI plunged into oversold territory on Thursday, potentially marking a new swing low for the contract. The outlook remains strongly bearish, with prices down nearly 9% from the February 23 closing high of $54.45 a barrel.
Gold prices were on track for their ninth consecutive decline Friday. The April futures contract dipped below $1,200 a troy ounce over night, and in the process gave up a major line of psychological support.
Bullion was last down 0.5% at $1,197.10 a troy ounce, having declined nearly $60 from the February 27 settlement high of $1,258.80. The outlook is strongly bearish, as evidenced by bullion’s sharp decline below its short-term and long-term moving averages. The MACD is overwhelmingly bearish and signalling renewed downside for the metal in the short term.