Technical Analysis 24-03-2017
By Antonis Vasloos
The euro broke higher earlier this week and appeared poised to test 2017 highs before a major hurdle supressed the rally. The EUR/USD has stalled within a familiar range below 1.08, which represents the upper band of a four-month trading range. Price action has also weakened, with the 20-day and 50-day simple moving averages on firm downward trajectories.
The pair is approaching oversold levels on the 1-hour chart, as the euro awaits further cues. The market is likely to be rangebound over the short-term.
The British pound is closing in on a major milestone that, if breached, could lead to a re-test of last November’s resistance. The GBP/USD is hovering just below the 61.8% Fibonacci retracement. A clean break higher would expose the pair to a major rally north of 1.2760. On the downside, the 50% Fibonacci level continues to offer strong near-term support.
The 50-day moving average has crossed the 100-day SMA and is moving sharply higher, reflecting the latest uptrend in cable. That uptrend will depend largely on the pair’s ability to overcome the near-term barrier.
Crude oil found a home below $48.00 a barrel on Thursday, as momentum continued to trek lower after a month of volatile price movement. The West Texas Intermediate (WTI) benchmark for U.S. crude futures bounced off oversold level Friday morning, according to the Relative Strength Index (RSI). The near-term outlook remains bearish.
The contract faces immediate resistance at the 23.6% Fibonacci retracement. Below that level, prices risk falling to new four-month lows.
Gold’s recovery stalled on Thursday, as prices ran into overbought resistance following a week of steady gains. The April futures contract was last down $3.40, or 0.3%, at $1,246.70 a troy ounce. Thursday was the first time in over a week bullion was unable to extend gains.
Prices are hovering near the lower end of the Bollinger band, a sign that a near-term reversal could be in play. A favourable tailwind could lift prices back up toward the monthly trend high above $1,260.00 a troy ounce.