Technical Analysis 29-03-2017
By Antonis Vasloos
The EUR/USD extended its winning streak this week to fresh four-month highs, as the bulls extended the rally up toward the 61.8% Fibonacci retracement. That level proved too difficult to overcome on Tuesday, as prices tumbled back toward the mid-1.08 region. The latest uptrend follows a series of higher highs that signal continued upward momentum for the pair.
Price action is strengthening, with the 50-day simple moving average on a clear upward trajectory.
The British pound moved sharply lower against the dollar Tuesday, as traders struggled to extend the rally amid growing uncertainty facing the British currency. The GBP/USD plunged around 150 pips to settle in the low-1.24 region. The down move knocked out a week’s worth of gains.
The money flow index (MFI) has swung from severe overbought levels to extreme oversold conditions over the past 24 hours, signaling renewed volatility for the pair. The short-term outlook remains neutral as the bulls and bears battle for position.
Crude oil rose modestly on Tuesday for its highest settlement in over a week. The West Texas Intermediate (WTI) contract closed at $48.36 a barrel on the New York Mercantile Exchange following a week of lateral moves. The trend outlook remains largely bearish, although early signs suggest the contract has already bottomed. The latest rebound is likely short-lived as prices threaten overbought levels. Both the RSI and MACD imply that overbought conditions are approaching.
Gold futures ran into a major resistance on Tuesday, pushing prices lower in overnight trade. Bullion was down 0.6% at $1,251.00 a troy ounce at last glance. The futures price faces immediate resistance at the 61.8% Fibonacci retracement. A clean break above that level would lead to a re-test of the post-election high near $1,340.00 a troy ounce. On the downside, immediate support is located at the 50% Fibonacci level.
Prices will struggle to break higher in the short term, as the 61.8% level is considered a major threshold.