Oil is approaching resistance

Oil (US) has been consolidating and correcting. It is currently running to important intra-day resistance level of 40.50. It coincides with 200 sma on hourly chart and also the high of August 24. There might be a false breakout of the area (very likely) and a reversal back to 38.50 or even the low of the year 37.75. 

As the commodity is in a clear downtrend only short positions should be opened. There are much higher chances to make profitable trades trading in the direction of prevailing move than trying to capture counter trend moves. 

Of course, the lower the security drops the sharper rallies upwards it will produce. I will only consider it buying after I see it fail to make new lows for a prolonged period of time. This would be a sign that the downtrend might be over and the commodity is being accumulated. For the time being such signs are not there and only sell positions should be considered. 

Next levels of resistance if the above mentioned is broken: 41.50, 42.00 and 42.50.

Key fundamental data today is: US Gross Domestic Product and US Core Personal Consumption both to be released at: 12:30 GMT. 

US Oil 1 hour chart

Euro Crashes in Waves Against US Dollar

After a sharp rally upward from strong resistance of 1.1200 level eur/usd reached strong resistance at 1.1700 and reversed dramatically dropping close to 400 pips in the last three days. The next logical level of support is surely 1.1200 level. According to definition of classical technical analysis previous resistance becomes support. So, if 1.1200 level was resistance, it should act now as support. There are around 130 pips to go till the target. It will be probably reached by the end of the week, possibly even tomorrow. 

Key fundamental data that might influence the moves in the pair:

Thursday: USD Gross Domestic Product Price Index at 12:30 GMT.

Friday: GBP Gross Domestic Product at 08:30 GMT. 

I do expect price to continue going in waves and a rally is expected at current level: 1.1322. Intra-day support is at an even number of 1.1300. Intra-day resistance is at an even number of 1.1400.

As always I will repeat myself by saying that I want to see a reversal pattern at a key level before I start buying or selling. This in most situations will be a candle pattern that develops on an hourly or 15 minute chart.

The pair is going down in waves

Pound closes below 1.5700 against US dollar

For a number of weeks gbp/usd fails to overcome 1.5700 level. I don’t see it as bearish or bullish; just state the fact how important the number is. There has to be a break at some point: up or down. On the other hand, 1.5688 is pretty close. That’s what the close was in the pair (at least on my charts). By looking at the 4 hour chart below you can see that from the 7^th of August cable was clearly making higher highs and higher lows against the greenback. It implies that Pound was in accumulation process and US dollar in distribution. This may not mean the tendency will continue, but it is likely.

Forex news that might impact exchange rate of the pair:

Tuesday: 14:00 GMT US Consumer Confidence

Wednesday: 12:30 GMT US Durable Goods Orders

Thursday: 12:30 GMT US Gross Domestic Product

Friday: 08:30 GMT GBP Gross Domestic Product

In my opinion the pair may broke or reverse from the key level any time at the start of the week without waiting for the above mentioned economic releases. Both FED minutes and BOE interest rates have been announced, so we may expect technical moves at any time next week. 

See with more updates on this Monday.

Higher highs and lows in gbp/usd