Oil in Range for the Second Week

As has been said earlier oil was expected to stay in a range for some time. There were obvious signs of a failed rally upwards that ended with the commodity reaching 49 level. It has been two weeks of ranging now. From technical point of view you can see a bearish triangle in development with the support being at 43.50 level and resistance with descending trend line at 46.00-46.50 area. There is a possibility of a false break above current resistance and a rally to 47.00-47.50 area, but in my opinion, price will likely stall at 46.50.

We should also remember that narrowing range is always followed by sharp increase of volatility and breakouts and prolonged moves. That’s precisely what I expect from the commodity. Sometime in the next couple of weeks the security should break through 43.50-43.00 level. A less likely scenario would be the commodity running above 46 level to 49 resistance and then going beyond that to 54-55 resistance. 

Anyway, if we have a rally towards 46.00-46.50 I would wait for some bearish signs (railroad tracks, bearish pin, M pattern and etc.) at the top to go short. At the moment I have no intentions of buying the security. 

BOE Data Should Give Direction for gbpusd

Yesterday saw low volatility in gbp/usd. 53 pips is a very low daily range for the pair. You know how volatile cable can get. It means directional move is coming. We have a good catalyst for that and that is Bank of England interest rate decision that is due at 11:00 GMT today. Of course, nobody expects an increase (to say nothing of a cut). If that happened we would probably see a huge gap in price of the exchange rate of the pair. 

However, any bullish or bearish signs in the wording of the statement can send the price to the sky or to hell. You may see from the chart below that resistance starts at 1.5425 that marks the low of the 7^th of August. Pound bounced of that level at that point and formed a nice bullish candle. It may play as resistance when the release comes out. Intra day support is at 1.5338 (today low). 

Next level of support would be 1.5300 area and resistance would be around 1.5490-1.5500 area. If 1.5490 is overcome the door to 1.5800 (the high of 25^th of August) would open up. Bias is slightly bullish right now. 

Oil Jumping Between Support and Resistance

Oil rally is clearly stalling. 49 level seems to be solid resistance. You can see on the chart below how nicely 200 ema stopped the advance of the commodity twice. Another thing are those bearish pins clearly seen on 8 hour chart. This indicates increasing bearish pressure and a move downwards can materialize any time now. On the other hand, if you look at 4 hour chart you can see that price is supported by 200 sma and ema there.

Support comes at 43.20-43.00 (US oil) area where you can spot a bullish pin. So, we can state that price is trapped between support and resistance and this causes short term range between 49 and 43 levels to continue for some time. Any attempt to come back to 48 is a sell to me. This week should see a narrowing range in the security which would lead to a breakout. I tend to think it will be downwards as longer term trend is still south. 

Intra day support is at 46.50, followed by 47.00. I am waiting for a false break up and then a bearish candle formation to go short. No intentions of buying the commodity at this point. 

eurusd Trapped Between Support and Resistance

The most popular Forex pair eur/usd is currently trapped by intra day support and resistance levels. The pair has been moving down in waves for around two weeks. It is being supported by 200 sma and ema on 4 hour chart (acts as support) and is trapped by 200 sma and ema on hourly chart. This situation won’t last long and price will eventually explode through one of the technical levels up or down. Bearish picture is favored as price rallied to resistance of 1.1230 today and formed a reversal candle (bearish pin) on the hourly chart. 

Price sort of holds above 1.1175 level, which was resistance yesterday and may act as support today. You may remember that price broke the level upwards today after a bullish triangle pattern on 1 hour and 15 minutes formed. However, the breakout occurred during Asian session and these kind of breakouts do not usually last for a long time. If the above mentioned support is broken, next area comes at 1.1100-1.1080. That should hold at least for today, but not sure if it is still there by the end of the week. Euro is also falling against British Pound, so the pressure for eur/usd to go downwards increases dramatically. 

British Pound Starts the Week on a Bullish Tone

After two weeks of falling, gbp/usd started the week on a positive note. On Sunday open it gaped down, but quickly came up and did not break lower anymore. It moved towards the low during European session, but formed a bullish w pattern on 15 minute chart and is rising now. You may see that intra day resistance is at 1.5273 level (Friday high). Intra day support starts at an even number of 1.5200 with key support being at 1.5160 (Sunday open low). 

There is no key fundamental data today or tomorrow that might impact exchange rate of the pair. On Wednesday GBP Industrial production is to be released at 08:30 GMT. Even more important data is coming on Thursday at 11:00 GMT. Bank of England interest rate decision is scheduled at that time. I have a hunch that US dollar bullish trend might be over for now and British Pound will strengthen from now on. On Friday inflation numbers from UK will also be carefully watched by market participants. Later in the day traders will also get USD U. of Michigan Confidence data, which should not have big influence on the pair.