Technical Analysis 21/4/2017
By Antonis Vasloos
The euro has found stability above 1.0700 US, as the currency failed to rally above the 61.8% Fibonacci retracement and subsequently fell below the 50.0% level. Immediate support is located at the 3.82% level. Price action has moderated over the past two sessions, with the 20-day and 50-day moving averages on a slight downward trajectory.
At the time of writing, the EUR/USD is being traded around 1.0718, virtually unchanged from the previous close.
After a 300-pip rally, the British pound has traded virtually flat over the past two sessions as the bulls relinquished control of the market. The trend direction is firmly bullish, with the 50-day moving average on a sharp upward trajectory above the 100-day MA.
Sterling’s next major hurdle is the psychological 1.3000 US level, which is also the 55-week moving average. Cable is trading around 40 pips below its April 19 settlement high and has seen its volatility decline rapidly over the past 48 hours.
A 4% flash crash on Wednesday zapped the momentum out of the oil market, reminding investors that the black commodity was still prone to wild fluctuations. Nymex WTI crude futures were last seen trading at $50.73 a barrel, a marked decline from last week’s high near $54.00.
Volatility has exposed US crude futures to further declines in the short run. The contract’s ability to hold above $50.00 will be crucial to avoid a bigger reversal back toward the March swing low.
The psychological $1,300.00 level remains elusive for gold, which failed to extend its bullish breakout over the past 48 hours. The spot contract was last seen trading at $1,280.22 a troy ounce, down 0.1% from the previous close.
A measure of trend strength known as the ADX indicator is very low, which is normally a sign of accumulation or distribution in the market. A lack of momentum suggests traders are on the sidelines in anticipation of new market catalysts.