Technical Analysis 6/2/2017
By Antonis Vasloos
Outlook: Slightly Bullish
The euro has settled within a familiar range since the start of February, with traders adopting a flat technical strategy. The EUR/USD remains firmly capped below 1.0800 after several failed attempts to overtake the short-term milestone. The pair was last seen trading at 1.07747 early Monday, which is about 50 pips below the 10-day highest high.
• Support (daily): 1.0777, 1.0770, 1.0762
• Resistance (daily): 1.0792, 1.0800, 1.0807
Despite slowing last week, underlying momentum in the RSI and MACD remains positive. This suggests the EUR/USD will likely remain rangebound in the absence of a significant trading catalyst.
The GBPU/USD faced strong headwinds last week, as the pair plunged below 1.2500. The declines would have been more dramatic without the support of a weaker U.S. dollar to break the fall. The pound has sold off nearly 200 pips since February 2 and was trading near session lows at 1.2480 at the time of writing. The sharp decline has also come with a loss of momentum, with relative strength drifting faster toward 50 and the MACD showing a loss of positive momentum.
• Support (daily): 1.2475, 1.2468, 1.2458
• Resistance (daily): 1.2492, 1.2502, 1.2509
Pound sterling appears to be consolidating below 1.2500. Traders can expect more bearish pressure for the pair in the short term.
Outlook: Slightly Bullish
Crude oil is trading above $54.00 a barrel for the first time since early January and is on track for its highest settlement in 19 months. The West Texas Intermediate (WTI) benchmark for U.S. crude futures reached a session high of $54.05 a barrel overnight Monday.
The short-term technical indicators show favourable upside for WTI, although a considerable break above $54.00 is needed to extend bullish sentiment. Trading activity in the futures market has been highly active since the start of January. Although price action has weakened in recent weeks, the 20-day SMA remains well above the 100-day simple moving average.
• Support (daily): $53.84, $53.77, $53.73
• Resistance (daily): $53.95, $53.99, $54.06
Crude’s short-term outlook will depend on its ability to sustain its current rally. A failure to do so will keep prices stuck in a familiar range with the potential for negative bias.
Gold futures approached three-month highs on Monday, picking up where they left off last week. The April futures contract was last up $4.30, or 0.4%, at $1,225.10 a troy ounce. The yellow metal is on a sharp upward trajectory, with prices converging on the 100-day simple moving average. Price action is also strengthening, with the 20-day SMA crossing above the 50-day SMA and approaching convergence with the longer-term average.
• Support (daily): $1,220.20, $1,217.85, $1,215.20
• Resistance (daily): $1,225.20, $1,227.85, $1,230.20
Traders can expect a combination of haven demand and technical support to keep bullion moving higher over the short term. Corresponding weakness in the U.S. dollar is also keeping prices on a sharp upward trajectory.