Technical Analysis 17-03-2017
By Antonis Vasloos
The EUR/USD is approaching the upper end of a four-month range, as the pair attempts at higher highs following a double-top formation at the beginning of March. The euro settled at a five-week high of 1.0776 U.S. on Thursday, having gained over 200 pips during the week. The pair is up more than 2.5% from its March 2 swing low.
The upside still has room to grow, based on the Money Flow Index, a price- and volume-based oscillator.
The British pound has broken into bullish territory on the 1-hour chart, as the GBP/USD crossed above the 20-day and 50-day simple moving averages on route to its highest settlement in two weeks. The pair has rebounded 2% from its March 13 swing low and appears poised to test the March 1 settlement high near 1.2400. It was last seen hovering around 1.2350 overnight.
The MACD is strongly bullish, confirming the upward trend reversal.
Oil’s recovery fell flat on Thursday, as commodity prices wavered on weak momentum and inconsistent buying interest. U.S. West Texas Intermediate (WTI) futures are down 10% since the start of the March, ending four months of relative stability. The contract has recovered from a swing low below $47.00 a barrel, but faces renewed bearish pressure over the short term. Even the latest uptrend showed weak underlying strength, based on the MACD.
Significant risk is being priced into the crude market at the moment, which could leave the contract vulnerable to further volatility.
Gold futures broke out in electronic trade on Wednesday, and remain well supported near their post-FOMC high. Bullion is trading above the 38.2% Fibonacci retracement and faces a critical resistance at the 50% Fib level, which is currently priced around $1,250.00 a troy ounce. A break above the 50% retracement would bring prices back toward the February settlement high near $1,260.00, and potentially expose further upside toward the 61.8% level.
Trend strength is firm, which supports expectations for further upside.