EURUSD outlook: Thick daily ichimoku cloud continues to limit recovery
(Slobodan Drvenica – Windsor Brokers)
Although the Euro stands at the front foot and continues to attempt higher, the recovery remains questioned, as thick daily cloud continues to limit the action for the sixth straight day, while falling 55 DMA (1.0614) additionally weighs.
Technical studies on a daily chart show still strong bearish momentum and mixed setup of moving averages (5,10,20,55), while daily cloud, spanned between 1.0596 and 1.0767, continues to strongly pressure the action that adds to stall signals.
Expect initial negative signal on return and close below 10DMA (1.0533), with drop below1.0469/56 (June 22 spike low/Fibo 61.8% of 1.0358/1.0614) to confirm lower top and shift focus towards key supports at 1.0358/49/40 (lows of June 15/May 13/2017).
Only sustained break above 55DMA would strengthen near-term structure and generate initial signal of bullish continuation of recovery leg from 1.0358.
Res: 1.0614; 1.0623; 1.0685; 1.0700.
Sup: 1.0577; 1.0533; 1.0517; 1.0486.
Gold (XAU/USD) in symmetrical pennant trading short on Nasdaq 100?
(Brad Alexander – FX Large Limited)
Despite the geopolitical events and the banning of purchases of Russian gold, price action is still consolidating.
We see a Symmetrical Pennant forming with the Stochastic Oscillator just now turning up from oversold.
Keep an eye on your indicators and the trend lines as we should get a breakout soon.
Also, price action is ranging between the 38.2% level of resistance and the 61.8% level of support.
Yesterday we promised to look at the US indices, like the NASDAQ as many analysts feel that the current rally is temporary.
USDCAD moving lower
From the technical point of view, we might be in agreement with them as price action is about to interact the upper trend line in this bearish channel.
Also, the Stochastic Oscillator is showing overbought so we will watch for a downturn.
If we switch to the 4-hour chart we can see that the Signal Line on the MACD has just passed out of the Histogram which often can be a bearish indication.
We recommended selling WTI and Brent Crude after this Rising Wedge and the short position came to an end with price action on WTI moving above $110 and perhaps back to this key level of resistance.
MACD is looking bearish and we note that the level of support is also the 38.2% Fibonacci level with more room to move lower.