Technical Analysis 4/5/2017
By Antonis Vasloos
The euro continues to advance against the dollar this week, as the bulls attempt to overcome an ambiguous technical outlook. The EUR/USD briefly traded above 1.0950 on Tuesday, its highest since November. Since the start of the year, the pair has formed two distinct higher highs and higher lows, signaling a potential shift in trend for the common currency.
The outlook has brightened recently, with the 100-day moving average crossing above the 200-day MA. Price action on the 50-day moving average maintains a sharp upward trajectory.
The British pound has caught a favourable tailwind over the past three weeks as traders took technical cues from a weaker dollar. Cable was last seen trading in the 1.2940 vicinity, putting it within reach of fresh seven-month highs. The pair has gained roughly 550 pips from the April swing low below 1.2400. Relative strength is on an upward trajectory and price action is also catching wind, with the 20-day moving average crossing above the 50-day MA.
US crude prices fell below $48.00 a barrel Tuesday for the first time in over a month, as the contract extended losses below the 61.8% Fibonacci level. The decline was widely predicted by the Fibonacci analysis and confirmed by the short-term momentum indicators, which suggest that a return to last month’s swing low is a distinct possibility. Although prices have rebounded back above $48.00, the outlook remains firmly tiled to the downside.Gold
Gold prices have entered a short-term bearish configuration after falling below $1,260.00 a troy ounce at the start of the week. With the decline, bullion fell below the 50-day moving average. The contract is testing initial support at the 23.6% Fibonacci level. A clean break below that level would expose the 38.2% region, followed by a break toward the 50% level.
The yellow metal has lost significant momentum over the past three weeks, signaling further volatility in the short term.