Sergey Golubev / Profile

EUR/USD: Breaking through several major supports
by Valeria Bednarik | FXStreet

Slowly but steadily, the EUR/USD has broke below several major supports this week, closing a few pips away from the 1.3600 figure and hovering around 200 DMA. The bearish tone was mostly due to weaker European macroeconomic data, that fueled hopes the ECB will act during next meeting, with dollar benefited by rising 10y yields over the last couple days. Nevertheless, the ongoing negative tone seems here to stay, as the daily chart also shows price broke below the 61.8% retracement of this year tally, around 1.3680, and the neckline of a double roof formation around 1.3650, all of them turning the upside quite messy from now on.

It will take a huge trigger to revert the bearish trend right now, and seems there’s not much ahead to trigger so, except maybe US GDP and Durable Goods data; but both numbers will have to disappoint big to gave the EUR a lift in this upcoming last week of the month. In Europe, Germany will gather most of the attention, with unemployment and retail sales readings, and if those disappoint, further downside should be expected.

Technically, the daily chart shows a strong bearish tone, with 20 SMA now capping the upside around 1.3780 also strong static resistance level and probable top in case of unexpected recoveries. Momentum has gathered strength towards the south and maintains it along with RSI that approaches the 30 level, all of which is also supportive of more falls. At this point, immediate support comes around 1.3570, where the daily chart presents several daily highs and lows from past December and January, with a continuation below exposing 1.3440/60 area, also a congestion of daily highs and lows. I would expect this last to be the latest level to reach next week, but if somehow gives up, the run can extend down to 1.3370 area, target of the daily double top.

The first resistance level to watch is the mentioned Fibo at 1.3680, with steady gains above pointing for a test of 1.3735, recent highs, 100 DMA and 50% retracement of the same yearly rally, while as commented above, 1.3780 is next.

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EUR/USD Technical Strategy:-

It has pushed below the 1.3670 mark which has failed to confirm the Hammer formation on the daily. With the Euro closing below the noteworthy level of support, further declines may be on the cards. Buyers are likely to step in to support the common currency at 1.3560.

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EUR/USD Technical Strategy:-

It continues to tease traders near critical support at 1.3670 with the Hammer formation on the daily suggesting the bulls are not prepared to relinquish their grip on the pair just yet. However, before suggesting a potential bounce back to 1.3780, the reversal signal needs to see confirmation from a successive up-day. A daily close below 1.3670 would signal strong conviction amongst the bears and open up the next noteworthy level of support at 1.3480.

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Gold Prices Consolidation Forming Bearish Continuation Pattern

Gold prices have been stuck in neutral since early April as it consolidates near 1300. The GLD ETF fell below 124 in early April and bouncing off the 50-62% retracement few times. A lower high formed in early May and a descending triangle could be taking shape now. This is a bearish continuation pattern and a break below the April lows would signal a continuation of the March decline.
The May highs mark a resistance zone in the 126-127 area.

A break above this zone is needed to negate the descending triangle and turn bullish on bullion. Gold needs to break 1320 to get some upside traction.

The 50-day moving average on the GLD is poised to close below the 200-day moving average, which is referred to as the death cross. When this occurs, a long term trend is considered in place and gold prices will likely continue to trend lower.

The Bollinger band width, which is calculated by subtracting the Bollinger band high (two standard deviations above the 20-day moving average) from the Bollinger band low (two standard deviations below the 20-day moving average). The end product is a representation of historical volatility as it shows that net standard deviation of the GLD time series. The low levels of historical volatility reflect the current consolidation in gold prices and reflects that prices could quickly jump with a new catalyst.

The Silver ETF (SLV) fell back to the December-January lows at the end of April and then moved into a tight consolidation. The Bollinger band width indicator has been below 5% for most of the last five weeks. Even though this volatility contraction is occurring near support, the trend since late February is clearly down. A move above this level would exceed the upper band and break the late April high. Such a breakout would suggest a successful support test and reverse the 12-week downtrend.

http://www.finances.com/analyses-and-opinions/analysis-opinions/5871-gold-prices-consolidation-forming-bearish-continuation-pattern.htm#

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