Technical Analysis 15-03-2017
By Antonis Vasloos
The euro experienced a sharp reversal on Tuesday, and faces bearish pressure at the lower end of the 1.0600 range. The EUR/USD was last seen trading at 1.0615, having declined 0.7% during the previous session. Prices bounced off oversold levels on the RSI, with price action deteriorating below the 20-day and 50-day simple moving averages.
Prices continue to fluctuate within a predictable long-term range between 1.0450 and 1.0850. The outlook is unlikely to change as the market calibrates lower.
The GBP/USD was back trading below 1.2200 on Tuesday after a failed recovery attempt during the previous session. The downtrend is still in play, with the pair declining more than 3% from the February 23 swing high. Prices bounced off the upper end of the Bollinger band on Monday, precipitating a sharp reversal back below 1.2200.
The Stochastic indicator has since moderated after approaching oversold levels earlier in the week. The outlook on the pair remains neutral-to-bearish over the short term.
Oil prices bounced back from three-month lows overnight after plunging below $47.00 for the first time since November. Nymex WTI crude was last seen trading up 86 cents, or 1.8%, at $48.58 a barrel. The U.S. futures contract is approaching the 23.6% Fibonacci retracement, and a clean break above that level would lead to a target of the 38.2% Fibonacci level, which coincides with the $50 a barrel mark.
Prices fell nearly 10% last week in what became crude’s biggest reversal in a year. The outlook is still bearish, as prices recover from Tuesday’s swing low.
Gold futures were little changed overnight Wednesday, as prices continued to hover north of $1,200.00 a troy ounce. The contract’s rangebound nature over the past four sessions suggests that selling pressure has subsided after a meteoric two-week decline. Bullion is currently hovering right above its 50-day and 100-day simple moving averages.
Prices have consolidated within a narrow range above $1,200.00. The money flow index suggests that neither buying nor selling pressure is particularly strong at present time. This is also confirmed by a relatively neutral reading on the RSI.