Technical Analysis 19/5/2017
By Antonis Vasloos
Technical Analysis 19/5/2017 | EUR/USD | GBP/USD | WTI Oil | Gold
The euro staged a large rally against the dollar this week, pushing prices above 1.11 for the first time since early November. The EUR/USD faces immediate resistance near Thursday’s intraday high above 1.1150. Strong downside support is offered near the 100-day simple moving average, which corresponds to the 1.1060 region.
Despite our bullish outlook, the pair’s trend strength remains weak, according to the ADX. This suggests the 1.11 handle may be difficult to maintain.
Despite being in a prolonged uptrend, the GBP/USD has struggled to establish new highs above the psychological 1.30 level. Cable breached that region on Thursday for the first time in eight months, but was unable to hold it for any considerable length of time. Momentum has been downgraded to neutral, as the pair looks less likely to lay claim to the September high of 1.3125, which is the next major technical hurdle north of 1.30.
Oil prices broke out to one-month highs in overnight trading, as momentum returned to the black commodity after a mid-week lull. The West Texas Intermediate (WTI) benchmark for US crude futures topped out at $49.88 a barrel, having gained nearly 1% from the previous close.
WTI’s trend strength is growing firmer, according to the average directional index (ADX). A reading north of 50 could reaffirm the presence of a very strong trend, pushing prices even higher over the short term.
Gold prices are on track for weekly gains, but have lost significant momentum over the past two sessions. Bullion is trading a tad below $1,250.00 a troy ounce, where it is rubbing up against the 38.2% Fibonacci retracement. This imminent support is keeping the yellow metal from succumbing to a sharp reversal back down to the low $1,230 region.
Relative strength is in the mid-40s after approaching oversold levels. The outlook remains neutral for the time being.