Technical Analysis 15/5/2017
By Antonis Vasloos
Technical Analysis 15/5/2017 | EUR/USD | GBP/USD | WTI Oil | Gold
The euro backtracked last week from year-to-date highs, but remains poised to continue its upward ascent. Prices faced strong technical support at the 38.2% Fibonacci level, which has paved the way for a rally back above the 23.6% Fibonacci retracement. The Relative Strength Index (RSI) is near overbought levels, pointing to sustained upside for the EUR/USD exchange rate. Prices were little changed at 1.0928 overnight.
The British pound continues to trade near eight-month highs against the dollar, although underlying momentum has vanished in the wake of the greenback’s latest rally attempt. Declining momentum, which is clearly reflected in the 1-hour MACD, has been accompanied by declining volatility. This suggests traders are on the sidelines in anticipation of other market catalysts. We therefore maintain a neutral outlook for now.
Oil prices have rebounded sharply from the May 4 swing low, a sign the latest rout in the black commodity was coming to an end. West Texas Intermediate (WTI) is testing the 50% Fibonacci retracement in overnight trading after closing above the 38.2% resistance level last week. Prices are currently trading at nearly two-week highs. A clean break above the next Fib. level is needed to confirm the short-term bullish signal.
Gold’s technical cues have improved recently, as the yellow metal quietly put together a three-day winning streak to close at its highest level in over a week. Broad measures of momentum, including the RSI and Stochastic oscillators, support further upside in the short run as bullion attempts to reverse three weeks of declines. However, the commodity remains in an overall downtrend, having only recently bottomed at six-week lows.