Technical Analysis 23/1/2017
By Antonis Vasloos
The euro rose to fresh six-week highs against the dollar on Monday, as the common currency steadied after a period of volatility. The EUR/USD exchange rate climbed 0.4% to 1.0743 in early Asian trading. The pair has added 1.1% over the past two sessions, more than offsetting a sharp drop on Jan. 19.
The pair is expected to trade within a choppy range in the short-term, as upbeat Eurozone data clash with dovish comments from European Central Bank (ECB) President Mario Draghi.
- Support (weekly): 1.0612, 1.0522, 1.0467
- Resistance (weekly): 1.0757, 1.0812, 1.0902
Pound sterling moved higher on the dollar Monday, and was already poised for its best settlement since mid-December. The GBP/USD exchange rate climbed 0.5% to 1.2435, where it was trading near session highs.
The British pound may be subject to volatility this week as investors await a high-profile Supreme Court ruling on Brexit, which will be announced on Tuesday. Brexit speculation sent the pound for a wild ride last week after Prime Minister Theresa May confirmed plans for a hard separation from the European Union.
- Support (weekly): 1.2098, 1.1820, 1.1661
- Resistance (weekly): 1.2535, 1.2694, 1.2972
Gold futures were back on the offensive Monday, as risk aversion returned after Donald Trump’s presidential inauguration. February gold futures strengthened $13.40, or 1.1%, to $1,218.10 a troy ounce on the Comex division of the New York Mercantile Exchange. That was the highest level in over two months.
Bullion has strengthened nearly 6% since the new year and is up 8% from its mid-December lows. The yellow metal’s newfound strength has been associated with a sharp reversal in the U.S. dollar.
- Support (daily): $1,211.09, $1,206.82, $1,204.64
- Resistance (daily): $1,217, $1,219.72, $1,223.99
After its second down week in a row, crude futures posted modest gains on Monday, as investors awaited further guidance on planned production cuts from major oil producers. US West Texas Intermediate (WTI) futures edged up 6 cents, or 0.1%, to $53.28 a barrel. The futures price fluctuated within a narrow range through the overnight session, as investors turned their attention to inventory data and industry headlines later in the week.
Crude oil’s fortunes have dimmed in recent weeks on expectations of higher US output. Relative strength is in the low 50s, while the MACD shows continuing declining momentum.
- Support (daily): $53.17, $53.02, $52.87
- Resistance (daily): $53.47, $53.62, $53.77