Buy opportunities in Gold

If we look at longer term charts in gold you may spot that after a prolonged downtrend, Gold has been bullish since the end of 2015. It was going up in waves. Pressure up has been building steadily and any technical analyst will say that buying on dips is a perfect strategy for this commodity. 

Taking into account that the world is facing dangers of nuclear war, in my opinion gold has only one direction to go now, which is up. 

You may also see that having run to 1365 level it corrected to 1307 level, then bounced and then fell back slightly below 1307 and bounced again forming a bullish pin on a daily chart. I assume we will see another leg up in gold and sooner rather than later we may see a long term break of 1375 level and a strong move after that. 

So, to sum up, I expect a strong upward trend to resume in Gold and opportunities to buy it are excellent now. 

Disclaimer

Financial markets carry a high level of risk. Investor can lose all his money trading them. You should not invest money that you can’t afford to lose. Information on this blog is for information purposes and should not be regarded as an advice to invest.

 

Oil Rally Stalls at Resistance

In my previous post on oil I wrote about bearish triangle that could be seen on 1, 2 and 4 hour charts. On the one hand it failed to materialize when price rallied through upper trend line of 45.50-46.00 (I took a small loss on that one). On the other hand, that does not negate the fact that the commodity is still in a downtrend and may resume its long term direction any time. You may look at 8 hour chart below and you will see that for the third time price rallied to 200 ema on 8 hour chart and each time a bearish pin candle pattern formed causing price to stall and then to fall. 

The same thing happened today. You can see an indecision candle first, and then two bearish candles, the second one being the signal for a short trade and if you had taken it (I surely did) you would have made nice cash by now. I entered my short at 46.49 with a stop loss above the high of the current move (47.72) and I took my profit at 45.20. Risk reward ratio on that was 1:1, but as the pattern was really strongly bearish and easily took the trade without thinking much about it. 

Support remains as it was at 43.50-43.00 area. I do expect it to be broken soon and price to reach another new low for the year. In my opinion oil is headed towards 30 and then possibly to 20. I play it only from the short side for the time being. 

Oil Hit Upper Trend Line

I mentioned in my earlier post that a possible bearish triangle was in formation in oil. Looks like my predictions are confirmed as today price hit upper trend line of the triangle and is reversing to the downside at the time of writing. As you may see from the chart below we have pressure building up for the commodity to go down. Any time it rallies up, it faces resistance earlier than previous time. So, the first point was 49.30, followed by 48.40, then 46.40, later 46.00 and now 45.60. Let me remind you that breakout traders would sell a break of key support that currently is 43.50-43.00 area. 

If breakout materializes we may see the security to go down as low as 37.50 (the low of August 24). I do have a small short position from 43.16 with a stop loss above today’s high. Let’s remember that the longer term trend is still down and a resumption of the direction may start any time now. FOMC rate decision tomorrow can surely be a good trigger for the continuation of the downtrend. Anyway, any bearish candle on the hourly chart at resistance could be a good point for entering a short position. Let’s wait and see what happens to the commodity. 

After a Few Weeks of Rise eurusd Reverses

After a few weeks of rise, eur/usd finally reversed. The turnaround started on Monday (yesterday), when having reached 1.1370 resistance the pair formed bearish rail road tracks pattern and started collapsing. Today’s price action only confirmed bearish bias in Euro. You can open both 15 and 1 hour chart to see that. Price tried to rally to intra day resistance of 1.1330 two times today, but failed. Each time it formed a bearish candle pattern after which price fell. As yesterday’s (low) support of 1.1280 was broken during US session we may assume that the move downwards will only accelerate this week. Be ready to sell at failed rallies to intra day resistance levels. 

Tomorrow’s possible intra day resistance will be at 1.1280. You remember the old saying that previous support becomes resistance and vice versa. I think this could be true in this case too. 

The next level of support is seen in the area of 1.1240-1.1220. Hourly chart clearly shows that Euro bulls had to work hard to break the level from the 8^th to 10^th of September. 

Important fundamental data that may impact the exchange rate of the pair is on Thursday when Federal Open Market Committee Rate Decision is announced at 18:00 GMT. Watch price action after the event and be ready to go in the direction market goes. 

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.