Technical Analysis 1/5/2017
By Antonis Vasloos
Technical Analysis 1/5/2017 – EUR/USD
The euro continues to trade in the 1.09 U.S. vicinity on Monday after the bulls set a fresh 2017 high the previous week. As for the technical outlook, the 4-hour chart shows strong upward momentum, with the Relative Strength Index (RSI) pushing higher. Prices ran into overbought resistance last week around the 1.0950 level.
Price action has also strengthened, with the 50-day moving average on a clear upward trajectory that adds further credibility to the bullish trend.
The GBP/USD moved higher last week, closing at 1.2950 amid broad weakness in the U.S. dollar. Cable declined 0.3% in the overnight session and was last seen trading at the lower end of the 1-hour Bollinger Band. The pair continues to trade in a bullish channel, with prices eyeing the psychological 1.30 level. Sterling has added more than 500 pips over the past three weeks.
While the short-term outlook remains favourable, long-term gains will be constricted by a rebounding dollar and bearish market forces with respect to the pound
Crude oil is vulnerable after a sharp two-week correction pushed prices below a critical support level. WTI crude futures settled below the 61.8% Fibonacci retracement on Friday, and were seen drifting further below that point at the start of the Monday session.
Prices have experienced sharp volatility over the past week, with the underlying trend showing continuing declining momentum. WTI’s technical breakdown exposes the contract to further losses in the short-term.
Gold prices have been mired in a downward spiral as of late after the bulls failed to justify a rally north of the psychological $1,300 level. Bullion has since declined around $30 as the market searched for direction. However, the latest decline has found a floor near $1,260.00 a troy ounce. Although a reversal may be in play, it is difficult to quantify at present.
The ADX trend strength indicator shows an absent or weak trend in the market, supporting our neutral outlook.