The euro broke big support on Wednesday just above 11500, bounced yesterday but is so far staying just below. We’ll have to see where we are by day’s end, but a close below for the week could spell trouble for next week. USD/JPY reversed hard from the resistance zone we looked at on Tuesday and is at risk of further losses. Crude oil extended up into long-term resistance and a volatile turnaround this week could be enough to turn the outlook bearish. Gold remains a difficult handle and should be avoided in favor of other opportunities until the picture clears up.
Technical Highlights:
- EUR/USD weekly close below support signals more losses
- USD/JPY reversed hard from resistance zone
- Crude oil turn from long-term resistance has downside in focus
- Gold remains a market for traders to watch not get too involved in
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EUR/USD weekly close below support signals more losses
On Wednesday, the euro broke through important support just above the 11500-threshold in place since May. This has pressure on downside to continue if no immediate recapture can take place. Old support becomes new resistance. Looking lower, the trend-line from December 2016 may help stem the current slide, but generally speaking things aren’t looking too good for the single-currency.
EUR/USD Daily Chart (Support broken)
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USD/JPY reversed hard from resistance zone
The other day we were discussing USD/JPY as it quickly came upon a resistance zone in the 11420/74 vicinity. Yesterday’s nearly full reversal of Wednesday’s gains has momentum quickly shifting lower after tagging an important area of resistance. This has focus turned towards lower prices in the days ahead. We also looked at charts of EUR/JPY, GBP/JPY, AUD/JPY, and NZD/JPY.
USD/JPY Daily Chart (Resistance puts lid on advance)
EUR/JPY 4-hr Chart (At support, make or break?)
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Crude oil turn from long-term resistance has downside in focus
In Tuesday’s webinar, we emphasized backdrop for oil as overly bullish heading into a major area of resistance. But how would oil act upon trading into long-term levels? Indeed, we saw a sharp turnabout yesterday as one might expect given an overly bullish market at long-term resistance via lows from 2011 and the 2008 trend-line. Stay below the weekly high of 76.88 and the outlook is favorable for lower prices, potentially much lower.
Crude Oil Weekly Chart (Big Resistance)
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Gold remains a market for traders to watch not get too involved in
We make mention of gold not because there is anything to really look at there, but because there really isn’t anything to look at there. Yet despite the lackluster price action while other markets move, traders continue to anticipate gold’s next move. After last month’s incredibly tight range it seems likely we will see a move soon, especially with other markets jostling around, but until further clarity it’s a market we prefer to avoid.
Gold Daily Chart (Choppy)
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Resources for Index & Commodity Traders
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX