Technical Analysis 8/5/2017
By Antonis Vasloos
The EUR/USD opened at 1.0999 Monday and briefly crossed the psychological 1.1000 handle before pulling back in overnight trade. With broader market forces already priced into the currency pair, the buy signal could prove elusive over the short term. The pair was last seen trading at 1.0974, down 0.2% from the previous close.
The short-term outlook is neutral as the euro looks to regain momentum after a prolonged push back toward 1.1000.
The British pound is coming off seven-month highs against the dollar, but struggled to regain that momentum at the start of the week. Cable was last down 0.3% at 1.2953 after the market rejected the latest attempt at 1.30. Price action has seen considerable volatility as of late, with the pair fluctuating sharply between overbought and oversold levels. The stochastic indicator was last seen in oversold territory, raising the prospect of a short-term bounce in the market.
Crude prices are in a consolidation trend after establishing a new swing low below $44.00 a barrel. Prices have since climbed above the 23.6% Fibonacci level, but are prone to strong bearish pressure. West Texas Intermediate (WTI) has seen heavy volatility as of late, with the market fully retracing its year-to-date gains in a matter of weeks.
Prices are approaching overbought levels on the 1-hour RSI, signalling that a potential pullback may be in play.
Gold prices have established a series of higher highs and higher lows since mid-December. The continuation of this trend, and thus the viability of a long-term rebound, depends on bullion’s ability to hold above $1,200 a troy ounce amid its latest downtrend. Price action is bearish, with the 50-day moving average crossing below the 200-day SMA. Momentum is also weak, with the MACD firmly entrenched in negative territory on the 4-hour chart.
The yellow metal staged a modest recovery Monday morning, edging above $1,230.00 a troy ounce.