Monday, August 31, 2015

Downtrend in gbpusd May be Over

After falling the whole week, gbp/usd may be turning around this week and go up. If the pair fails to break Friday low, we may wait a few pushes up this week. There are two levels of support down. The first one is Sunday open low which was made in the first 15 minutes on the open and then cable rallied and formed a high of 1.5436, which failed to be broken on Frankfurt open. Pound briefly went below Asian low 1.5399 by one pip before running sharply upwards. We can still expect a retracement to 1.5380 level, which I expect to hold. The next level of support is Friday low: 1.5335. 

Resistance is today’s high (Frankfurt open high) at 1.5437 (200 ema and sma are blocking the way upwards), followed by 1.5490 (same indicators on 30 minute chart) and 1.5508 (the high of 27th of August). 

There is no key fundamental news today that might affect exchange rate of the pair. Tomorrow will see: GBP Net Consumer Credit, Net Lending Sec. on Dwellings, Mortgage Approvals and most importantly Markit UK PMI Manufacturing SA all coming at 08:30 GMT. 

Key data from United States will be: USD ISM Manufacturing coming at: 14:00 GMT. 

Sunday, August 30, 2015

Oil rallies but price stalls on 4 hour chart

Oil has recovered slightly from its most recent slump. On the 24th of August the commodity hit its low for the year and rallied upwards throughout previous week. You may see three waves up on the chart, which means the security, may be due for a correction or a fall back to previous lows. In any case, the most logical thing to happen now is some consolidation at the level or a topping process and then a move down in waves. 

You may also spot 200 sma and ema on 4 hour chart and price stalling when it hit the indicator. I assume a lot of traders have taken their profits off the table when the price touched the indicators. 

Of course, another rally of 5 bucks is possible. In that case we would see 50 or 51 in US oil. I tend to think we would probably end closer to 50.50, because the level marks previous support of consolidation on the way down. 

Anyway, we need to wait and see how the market performs on Monday and Tuesday to see whether a move up or down is more likely. 

Long term trend: down
Intermediate trend: down
Short term trend: up

Saturday, August 29, 2015

Gold Reverses at Resistance

On the 20th of July Gold found its’ bottom after falling sharply for around a month. You can see that from that moment on the commodity has been going up in waves by forming bases and then rising further forming another base. There have actually been three levels of rise. Resistance of the first level was at 1110, resistance of the second base at: 1127 and finally the security reversed at 1170 forming two peaks. The first peak formed railroad track pattern (bullish candle up and then the next one down engulfing the bullish candle). The second peak represents a failed attempt of breakout of previous high. Gold managed to break above the first high by around 1.5 dollar per ounce before collapsing to the first level of support at 1145. 

Railroad tracks and a bearish pin on 4 hour chart at resistance indicate that short term bullish trend is over and now gold price will head lower. Looking forward to next week we may state that resistance is now at 1145, where previous support was (according to rules of classical technical analysis). Support can be seen at 1125, 1120 and 1110 levels. I see 1110 as the strongest one and it will probably hold for next week. However, attempts to go above 1145 will probably fail and if one sees a bearish candle formation at that level, it will be a good signal to go short. 

Momentum: Bearish
Intermediate trend: Neutral

Friday, August 28, 2015

S&P 500 Runs Into Resistance

After tumbling 260 points in 4 days S&P 500 index managed to find support 1860 area having reached its’ lowest point of 1833 (the lowest level since October of last year). You can see from the daily chart below that price of the security sits around 1980 level, which was previous technical support from 2014 December through February of 2015. We may say that the price has already recouped more than half losses in the last three days. It means we may see more resistance and roadblocks on the road that may stop the index from rising further. 

If you checked the hourly chart you would also see that price bumped into 200 sma and was not able to overcome it today. A bearish pin is also there on the hourly. On the other hand, intra day support is also clearly seen at 1950 area, which acted as resistance for three days (August 24, 25 and 26). When price fell to the area on the 27th (briefly) a bullish hourly candle formed immediately. If the recent drop was a temporary thing, we may expect to see more consolidation at current price levels and then a rise back to 2040 (minimum), and maybe even to all time high. 

British Pound Testing Yesterday Low

After three days of going down gbp/usd is testing yesterday’s low and it might hold this time. GB Gross Domestic Product data came out exactly as expected both annual and quarterly figures being the same as predicted. This did not stop cable from falling down. It rallied initially on the numbers, but later collapsed and is now breaking or trying to break 1.5370 level. We need to wait for hourly candle close to be surer whether the breakout is a convincing one or a false one. 

It seems to me that some profit taking on US dollar longs should be taken before the weekend and so we may see greenback giving up gains. Resistance is seen around even number of 1.5500. No more serious data is scheduled from Great Britain or US. Traders will watch numbers from Europe at 12:00 GMT when German Consumer Price Index data comes out. This will have more impact on eur/usd and possibly eur/gbp pair. I do expect Euro Pound pair to erase its gains after strong rising since 18th of August. 

US Personal Consumption Expenditure, Personal Income and Personal Spending come out at 12:30 GMT, but the data will probably not impact any of the above mentioned currencies much.