The Euro started a downside correction after trading to a new monthly high at 1.1920 against the US Dollar. EUR/USD declined below 1.1880, but it remained well bid above the 1.1750 level. Looking at the 4-hours chart, the pair found a strong support near the 1.1750 level, the 100 simple moving average (4-hours) and the 200 simple moving average (4-hours). A swing low was formed near 1.1745 before the pair started a fresh upward move. It climbed back above the 1.1800 level, and traded above the 38.2% Fib retracement level of the downward move from the 1.1920 high to 1.1745 low. Moreover, there is a key bullish trend line forming with support near 1.1805 on the same chart. If there is a downside break below the trend line support, the pair might find support near the 100 simple moving average (4-hours). Any further losses may perhaps open the doors for a sharp decline towards the 1.1700 support zone. Conversely, the pair could continue to rise towards the 1.1860 and 1.1880 resistance levels. The next major resistance is near 1.1920, above which the pair could rally towards the 1.2000 level in the near term.
The British pound rallied during the trading session on Friday, bouncing from the 1.31 handle. The market looks as if it is ready to try to keep the uptrend going, as the recovery has been quite stringent. Furthermore, the British pound always seems to have a lifeline in the current environment, so this is a market that I am very cautious about shorting and I have given up the idea of fading it. If we do pull back from here, we will eventually find buyers near the 1.30 level, an area that continues to be of significance. That is a large, round, psychologically significant figure which has the 50-day EMA sitting right there as well. In such a scenario, many people would be looking to take advantage of value down in that area. The area between the 50-day EMA and the 200-day EMA is a massive “support zone”, and it is likely that we will continue to see a lot of upward momentum. As a result, the British pound could eventually break to even higher levels. This is a market that should eventually go looking towards the highs again near 1.35.
USD/JPY remains mildly on the downside at this point. Current development, with the pair staying below 55 day EMA and falling channel, suggest that decline from 111.71 is still in progress. Retest of 103.17 low should be seen first. Nevertheless, on the upside, break of 105.67 will target 106.10 resistance.
The technical outlook for AUD/USD remains skewed to the topside as price continue to track firmly above all four moving averages and key psychological support at the 0.7200 mark. With the RSI eyeing a push into overbought territory and the MACD indicator climbing to its highest levels since mid-September, the path of least resistance appears to favour the upside. A daily close above the November 9 high (0.7340) may invite follow-through and carve a path to challenge the September high (0.7413). Breaking through that would probably bring the 78.6% Fibonacci (0.7573) into focus. Alternatively, breaching support at the 21-day moving average (0.7196) could inspire would-be sellers and ignite a pullback towards the 61.8% Fibonacci (0.7131).
USD/CAD is turned neutral with current retreat, but further rise will remain in favor as long as 1.3057 minor support holds. on the upside, break of 1.3172 temporary will target 55 day EMA (now at 1.3203) and above. But still, as long as 1.3389 resistance intact, larger fall from 1.4667 is in favor to resume. Break of 1.3057 minor support will turn bias to the downside for retesting 1.2928 low.
The US oil prices are gaining altitude on Monday alongside risk-on action in the global equities and forex markets. The West Texas Intermediate (WTI) crude, a North American oil benchmark, is currently trading at $40.66 per barrel, representing a 1.32% rise on the day. Despite the recovery from Friday's low of $40.66, the immediate bias remains bearish. The black gold is yet to penetrate the hourly chart descending trendline connecting Nov. 11 and Nov. 12 highs. As of writing, the trendline hurdle is located near $41.12. Acceptance above that level would open the doors for a re-test of the recent high of $43.06. As long as the trendline hurdle is intact, the risk will remain skewed in favor of a drop to the 50-day simple moving average (SMA) located at $39.46.
Gold is currently trading 0.28% higher on the day at $1,894 per ounce, having declined by 3.19% last week. The metal's 50- and 100-day simple moving averages (SMAs) have almost produced a bearish crossover, the first since December 2019. The SMA indicators are quite popular, especially among tyro traders/investors. last Monday's high of $1,965 to confirm a bullish revival. On the downside, $1,850 is the level to beat for the bears. That level has acted as strong support multiple times since the second half of September. The immediate bias would remain neutral as long as prices are held within last Monday's trading range of $1,850 to $1,963.
Legal: CF Merchants is the trading name of Commodity and Forex Merchants registered and regulated in many Jurisdictions. CF Merchants Limited is regulated with license number 24535/2018, at Suite 305, Griffith Corporate Center, P. O. Box 1510, Beachmont, Kingstown, Saint Vincent and the Grenadines as an International Broker Company under the company act of Saint Vincent & the Grenadines. The objects of the Company are all subject matters not forbidden by International Business Companies (Amendments and Consolidation) Act, Chapter 149 of the Revised Laws of Saint Vincent and Grenadines 2009, in particular but not exclusively all commercial, financial, lending, borrowing, trading, service activities and the participation in other enterprises as well to provide brokerage, training and managed account services in currencies, commodities, indexes, CFD’s and leveraged financial instruments.
Commodity and Forex Merchants Limited is authorized under license number 1092420 by the Companies House, Cardiff, United Kingdom on 21st August 2017.
High Risk Investment Warning: CFDs and margin FX are leveraged products that carry an extraordinary level of risk to your funds. Trading is not suitable for everyone and may result in you losing significantly more than your investments and therefore, you should not speculate with capital that you cannot afford to lose. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. All the trading related information on this website is general in nature and does not take into account your or your client’s personal intentions, financial conditions and needs. We encourage you to seek independent advice if necessary. It is the responsibility of the client to ascertain whether he/she is allowed to use the services of the CF Merchants based on the legal requirements in his/her country of residence. Please read full Risk Disclaimer for more details.
Regional Restrictions: CF Merchants (SV) Ltd does not provide services and accept applications from the residents of certain countries, such as United States of America, Canada, Israel, North Korea and Saint Vincent & The Grenadines. The statistics on this website is not directed at residents in any country or jurisdiction where such distribution or use would be contradictory to local law or regulation.