EURUSD pair managed to violate the critical resistance at 1.2012 during yesterday’s trading session, reaching values of 1.2082 in the early hours of today’s session and further strengthening the upward momentum. Expectations are for the upward movement to continue and for the pair to focus on a test of the next critical resistance at 1.2150. The first important support is the previous resistance – the level of 1.2012. Today, investors’ attention will be focused on the ADP data on the change in employment in the U.S.
The British Pound started a strong increase from the 1.3280 support zone against the US Dollar. The GBP/USD pair broke the 1.3350 and 1.3380 resistance levels to move into a positive zone.
There was also a close above the 1.3400 barrier and the 50 hourly simple moving average. The pair traded as high as 1.3440 before starting a short-term downside correction. It seems like there is a contracting triangle forming with resistance near 1.3425 on the hourly chart.
USDJPY has been moving sideways the past week within the 104.00 area and slightly below its 20-day simple moving average (SMA), showing no intention to escape the eight-month old bearish channel. On the upside, the upper surface of the cloud currently seen around 105.20 is at a reachable distance, but the bulls may first need to claim the 23.6% Fibonacci of the 109.84 – 103.17 down leg at 104.74 before they target that obstacle. A significant step above the channel may raise buying interest, and it would be interesting to see if the 38.2% Fibonacci of 105.70 can halt the rally as it did several times over he past two months, deterring any move towards the 200-day SMA and the 50% Fibonacci of 106.50.
Alternatively, a downside reversal below the 104.20 mark, which has been frequently tested from the end of October onwards, could open the door for the swing low of 103.64. If sellers manage to pierce the 103.16 trough too, the decline could sharpen towards the key 102.26 support region.
The Australian dollar is trading quietly on Wednesday. Currently, AUD/USD is trading at 0.7378, up 0.09% on the day. The Aussie is closing in on the symbolic 0.74 level, after testing this line on Monday. AUD/USD faces resistance at 0.7485. Above, there is resistance at 0.7569
We find support at 0.7301, followed by support at 0.7216
The pair remains slightly above the 10-day MA line
USD/CAD remains on the downside at this point. Decisive break of 1.2928 support will confirm resumption of whole down trend from 1.4667. Next near term target will be 61.8% projection of 1.3389 to 1.2928 from 1.3172 at 1.2887, and then 100% projection at 1.2711. On the upside, above 1.3025 minor resistance will delay the bearish case, and extend the consolidation from 1.2928 with another rising leg first.
Technically, WTI has likely formed a bearish pattern and since entered a technical correction. An immediate support level can be found at US$ 43.40 – the 23.6% Fibonacci retracement. Breaking this level may open the door for further losses with an eye on US$ 41.60. The RSI indicator has pulled back from overbought territory as price consolidates, pointing to more downside risk.
Gold’s recovery from five-month lows of $1765 gains further traction on Wednesday, as the bulls gear up for a test of the earlier critical support now resistance at $1850.
The technical set up favors the bulls, as the price confirmed a bull pennant breakout on the hourly chart in the last hour. The validation came in after the metal gave an hourly closing above the falling trend line resistance at $1815.
The price pierced above the 200-hourly moving average (HMA) at $1819, offering extra zest to the XAU bulls after the big breakout.
The hourly Relative Strength Index (RSI) marches into the overbought territory, currently at 74.05, implying that the price could reverse to test the 200-HMA before resuming its upward journey towards the $1850 level.
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