Technical Analysis 17/5/2017
By Antonis Vasloos
Technical Analysis 17/5/2017 | EUR/USD | GBP/USD | WTI Oil | Gold
The upsurge in the EUR/USD continues, with the pair reaching the ever-important 1.11 handle. Prices have resumed their uptrend over the past four sessions, and are trading at their highest level in six months. With the gains, the euro has confirmed its bullish position. However, imminent gains north of 1.11 will be difficult to justify given the strong overbought signals emanating from the Relative Strength index (RSI) and Stochastic indicator.
Cable has taken meaningful steps toward the elusive 1.30 handle, but has failed to cross despite underlying weakness in the dollar. The hunt for 1.30 took price above 1.2970 on Tuesday, where it ran into overbought resistance according to the 4-hour Bollinger Band formation. The GBP/USD continues to trade near the upper end of the range, which could limit any breakout attempts in the short term. The outlook remains neutral as a result.
Oil prices snapped a four-day winning streak Tuesday, as prices recoiled back toward the 38.2% Fibonacci retracement. The 38.2% level provides a strong zone of support as prices continue to eye the 61.8% formation, a move that would expose WTI to further gains north of $50.00 a barrel.
WTI is oversold at $48.10 a barrel, which suggests an imminent correction higher is in play.
Positive momentum is on the side of gold, as prices continue to recover from last week’s swing low. Gold prices have gained in each of the last five sessions, and appear poised to continue higher on Wednesday. Bullion was last seen trading north of $1,242.00 a troy ounce, a nearly two-week high. Bullish upside could run into resistance in the short term as prices approach overbought resistance, based on the various momentum charts. Nevertheless, the conditions are favourable for continued upside, as precious metals benefit from a recent selloff in the US dollar.