USD/JPY at extremely overbought conditions

During the last week the USD/JPY pair continued to climb up and topped at 110.91. Today the pair is seen even higher and marked an intraday high at 111. 33, a level that has not been visited since late May. In the short term the downward movement seems to be limited, as 100-day and 200-day simple moving averages remain well below the current level.

As it is clearly seen on the H4 the technical indicators are placed at extreme overbought area. RSI is starting some correction from the overbought area, while stochastic is showing lack of momentum.

The bias remains bullish for testing 111.50. A clear break and daily close above this level could trigger further upside pressure towards 113.50 this week. The nearest support is located at 110.35. A possible break below that area could lead the pair to neutral trading levels with testing 109.80, but still the bulls possess the short term development for the upcoming days. 

Shining Dawn Tumbles Down

While markets are relatively calm now as Trump’s victory seems to be digested, Gold is extending sell-offs and slided downwards to pin lowest level, not seen since May 2016. Furthermore we have two key factors, that have influenced negatively to the precious metal – the sell-off in treasuries and the rising expectations of the forthcoming Fed rate-hike action.

Technical indicators are showing oversold conditions. RSI is sliding around 30% and stochastic is placed within extreme low values and is displaying weak bearish momentum. 

At the time of writing XAU/USD is trading at $1207 and has crossed the 50% Fibonacci retracement level at $1210, acting as a strong support. Meanwhile the 50-day moving average crossed with the 200-day moving average and has passed below it. This could only increase the pressure on Gold as this situation is interpreted differently by traders. 

In the short-term expectations remain bearish with eventual further drop to next support, located at $1172 (61.8% Fibonacci retracement level).

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GBP/USD at neutral stance

The GBP/USD pair was trading lower during yesterday’s session and remained under the 50-day moving average. Today the pair is seen slightly elevated especially in the morning, when the UK retail sales data was released and surprised with better than expected numbers. Anyway this is not enough to support the Pound in the near future as all eyes are focused on the upcoming Fed’s meeting and considering the rising expectations for rate hike.

RSI is currently placed withing the mid lines and showing lack of momentum. Stochastic is indicating bearish signs and moving downwards from the mid-lines. Both indicators are not pointing bullishness. Testing the support at 1.2350 will hint the short-term attitudes. If crossing this line, a slide towards the next support at 1.2090 is expected. Looking to the upside resistances are seen at 1.2545, 1.2670 and 1.2775.

EUR/USD: Rolling To The Deep

Trump’s win seems now to be digested by market participants and the US dollar’s strength is loosing momentum. During the Asian session the EUR/USD pair pushed slightly higher and topped at 1.0815, but later on the freshly released EU macro data moved the pair back to previous positions. 

Another macro data today was released from the US calendar, showing better than expected numbers on retail sales. So for shortly the US dollar was uplifted, but currently the pair is trading at 1.0718 and is heading to lowest levels for the week. 

RSI is placed at around 36% and is loosing momentum. Stochastic is located at extreme oversold area and also pointing lack of momentum. Both indicator remain flat within bearish area and confirming the downward slope.

USD/JPY: Bulls Aiming 111.00 Level

USD/JPY posted strong growth on Monday with daily gains of + 1.44%. The pair broke the important area at 107.50/107.80 and marked fresh high at 108.52.  

The Yen was influenced by the positive GDP data and Kuroda’s speech, who pointed that the inflation will rise slowly and monetary policy will not change until inflation reaches the target of 2%. Meanwhile Fed’s rate hike in December is also relevant to the pair with expectations have risen sharply after Trump’s win. 

Technically speaking, bulls are now fuelled to continue slowly upwards and test the next key resistance level at 111.00/111.60. RSI and Stochastic are placed now at overbought territory with the pair breaking the 200-day moving average, which is pointing that correction is not excluded. 

Gold: Disturbed By The Sound Of Populism

Running through the memory of 2016 Gold is seen on the street of dreams. Lows, highs, runaways. Brexit case elevated the spirit and affected positively to the forever safe-heaven commodity. But now Trump’s victory set another brick in the wall and Gold parted with the $1300 levels.
During the past week the yellow metal is down with 6%. The initial enthusiasm lifted up the rate, but now it seems that the tale was not right and a dramatic reversal followed.
Current the price is placed at $1226. Applying the retrospective 2016 upside movement, first support is seen at 50% Fibo retracement $1223 and second is lying at May’s $1198. Looking to the upside $1284 is a key level that might relight the bulls power.
Indicators readings are indicating oversold market and showing lack of momentum.