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Technical Analysis 28/6/2017

June 28, 2017
By Antonis Vasloos
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EUR/USD: EURO HITS 10-MONTH HIGH

Outlook: Bullish

Europe’s common currency enjoyed a burst of momentum Tuesday, as the common currency scored fresh ten-month gains against the dollar. The EUR/USD exchange rate was last seen hovering in the mid-1.1350 region, where it is considered overbought according to the Relative Strength Index (RSI) and Stochastic indicator. Though a pullback is likely, the pair appears poised to continue higher as momentum has clearly shifted in the favour of the euro.

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GBP/USD: STERLING EXTENDS GAINS, AVOIDING DOUBLE-TOP

Outlook: Bullish

Cable succeeded in breaking above the 1.28 threshold on Tuesday, its third higher high of the week. In doing so, it avoided a double-top formation with the 18 June high that could have unraveled the latest rally attempt. The GBP/USD is currently testing the 61.8% Fibonacci retracement from the 8 June high. Though overbought, prices appear poised to break above that key threshold in the short term.

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WTI Oil: BULLISH REVERSAL IMMINENT

Outlook: Neutral

Crude prices were back on the defensive Wednesday, but a sharp reversal earlier in the week has signaled renewed momentum for the black commodity. WTI is trading above $44.00 a barrel, having rebounded sharply from last week’s swing low. The 50-day simple moving average (SMA) is converging on the 200-day SMA. This convergence will trigger a buy signal for bargain hunters looking to capitalize on the correction.

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Gold: BULLION STRUGGLES FOR DIRECTION

Outlook: Neutral

After an early-week selloff, gold prices stabilized on Tuesday as traders capitalized on a plunging US dollar. Bullion now finds itself back in familiar territory. Prices are struggling to overcome the 23.6% Fibonacci retracement going back to the 7 June high. A clean break above that level exposes several technical hurdles on route to $1,300. The outlook remains neutral for the time being.

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