Technical Analysis 26/4/2017
By Antonis Vasloos
The strong uptrend in the euro continued Tuesday, with prices consolidating at fresh yearly highs. The EUR/USD was up 0.1% at 1.0937 at the time of writing, having gained nearly 400 pips over the past two weeks. Prices are tracking near the upper end of the Bollinger Band, which points to a short-term consolidation. The outlook remains favourable as the dollar continues to struggle for momentum against a basket of other major currencies.
The British pound rebounded on Tuesday, pushing to fresh session high of 1.2845 US. The US dollar continued to trade at multi-month lows against a basket of other currencies, which provided a short-term catalyst for sterling.
Cable has gained 300 pips over the past seven days. However, there is evidence that the uptrend is running into fatigue, with the MACD oscillator showing signs of slowing upward momentum. The Stochastic indicator has moved back to overbought levels, a sign that a short-term reversal may be in play.
Crude oil has shifted into lower gear this week, with prices slipping below a key technical support that could expose a bigger reversal. US West Texas Intermediate (WTI) has crossed below the 61.8% Fibonacci level. A full retracement back to the March swing low near $47.00 is now a possibility.
Crude prices have been subject to higher volatility over the past two weeks, leaving the market exposed to further downside pressure.
Gold prices are on track for a third consecutive decline, as the market continues to retrace from last week’s swing high north of $1,295.00. Bullion has declined more than $30 in the process and has crossed the 23.6% Fibonacci retracement. That leaves the 38.2% level as the next likely support target. On the opposite side of the ledger, immediate resistance is located at the 50-day MA near $1,275.00.
The downshift has exposed bullion to oversold pressures, according to the Relative Strength Index (RSI).