Technical Analysis 25/1/2017
By Antonis Vasloos
The euro edged lower against the dollar on Tuesday before paring losses to finish at 1.0734 US. On Monday, the EUR/USD exchange rose to more than six-week highs, as the dollar continued to backtrack against a basket of other major currencies. Looking ahead, the pair is likely to face increasing resistance between 1.08-1.09. Large supports exist at the upper end of the 1.0600 region through to 1.0720. The EUR/USD was last seen trading at 1.07311.
The pair will likely be influenced by economic data toward the end of the week, as the US government reports on fourth quarter GDP and December durable goods orders.
- Support (daily): 1.0707, 1.0683, 1.0649
- Resistance (daily): 1.0765, 1.0799, 1.0823
The British pound completed its fourth consecutive advance against the dollar on Tuesday, although gains were capped by a strong technical resistance and slightly shifting fundamental focus. The GBP/USD settled at 1.2525 on Tuesday, having gained 2.2% over the previous four days. The pair was little changed in Asian trading, and was last seen hovering at 1.2519.
A clean break above 1.2575 could lead the pair to a re-test of the December highs closer to 1.28.
- Support (daily): 1.2442, 1.2363, 1.2311
- Resistance (daily) 1.2573, 1.2625, 1.2704
Brexit talks will continue to influence the pound in the short term after the Supreme Court ruled that Prime Minister Theresa May must consult with Parliament before triggering Article 50 of the Lisbon Treaty – the formal mechanism for exiting the European Union.
US oil futures gained on Tuesday, but upside was limited after a report from the American Petroleum Institute (API) showed crude inventories rose 2.9 million barrels in the latest week. The West Texas Intermediate (WTI) benchmark for US crude futures settled up 32 cents, or 0.6%, at $53.07 a barrel on the New York Mercantile Exchange. That was the benchmark’s fourth consecutive advance. WTI was little changed overnight.
Crude futures are trading below the January 6 settlement high of $53.99 a barrel, which was also the highest since mid-2015.
- Support (daily): $52.72, $52.25, $51.83
- Resistance (daily): $53.61, $54.03, $54.50
Gold futures lost momentum on Tuesday, but continued to trade near two-month highs as investors opted for riskier assets tied to US corporate earnings. US stocks rose sharply, with the S&P 500 Index and Nasdaq Composite hitting new record highs. Demand for gold, which is normally viewed as a haven investment, weakened in response. The February futures contract fell $6.70, or 0.5%, to $1,211.80 a troy ounce on Tuesday. Prices were down another 0.5% overnight, reaching $1,205.00 a troy ounce.
- Support (daily): $1,205.66, $1,201.03, $1,194.36
- Resistance (daily): $1,216.96, $1,223.63, $1,228.26