This week has been quiet with no unexpected volatile surprises. Crypto has consolidated and we have not seen much directional change.
PPI data came out yesterday and was lower than expected, this was a bearish signal for the Dollar. Shortly after the news, we saw bullish moves in Gold followed by a bear run which was expected for the asset.
Currency pairs reacted to the news with GBP/USD and EUR/USD seeing massive spikes upside to set new 3-month highs and USD/JPY saw a massive fall below $139 which was a 3-month low for the FX pair.
It seems the support and resistance levels were hit for most major currencies as these spikes due to the Dollar selloff were accompanied by retracements in their respective directions.
The Dollar has traded lower since the open although investors are anticipating that it should reverse in the near term.
In today’s DIFX Analytics, we’re going to look into the following assets:
Bitcoin has formed a strong resistance at the $17,000 level. We await news from the crypto space which could influence the directional flow of the asset.
Technical indicators are suggesting we are in a period of consolidation with no clear trend for the past few days.
If the resistance line is broken to the upside, we can expect price action to enter the range between $17,600 and $18,400. If the resistance line is rejected, we should see price action continue to consolidate between $16,000 and $17,000.
Ethereum is trading within an asymmetric triangle. RSI is reading mid-range at 48 and the price action is below the 50-day EMA which is a bearish trend signal.
If the triangle is broken to the upside then we can expect the 50-day EMA to be tested before a move to $1344. Otherwise, which seems more likely during this bleak phase within the space, then we can see a bear slide toward $1070.
Gold is currently following a bull trend against the 50-day EMA. We can see it has touched against the dotted trend line frequently during this bull run without intercepting it.
RSI was following a similar trend until recently when it broke beneath this support. This is a clear sign of a bearish divergence.
We may see price action break the 50-day EMA and the trend line followed by a fall into the range presented in the chart. We expect the retracement to stall around $1745 and $1755.
EUR/USD has seen a solid gain in the past week. Price briefly made a move for $1.05 before a rejection back down to the $1.036 level.
RSI is losing momentum but it is still trading against the trend and we don’t see much confirmation of a reversal yet. Once this RSI support is broken, then we should see substantial downside movement.
Traders are expecting a bearish retracement toward the 50-day EMA at $1.017.
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DIFX shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee, or implication by DIFX that the forecast information will eventuate, that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses in particular if the conditions or assumptions used for the forecast or mentioned in the analysis do not eventuate as anticipated and the forecast is not realized.