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The Market 22/07/2014

IronFX Global

EUR/USD in a consolidative mode, slightly above 1.3500

EUR/USD moved in a consolidative mode on Monday, remaining slightly above the psychological zone of 1.3500 (S1). Bearing in mind that we can identify positive divergence between the RSI and the price action, and that the MACD lies above its trigger line and is still pointing up, I would expect a rebound, maybe for another test near the 1.3580 (R1) zone. On the daily chart, I see a possible hammer candle, increasing the likelihood for an upside corrective wave. Nonetheless, I would keep a neutral stance as far as the overall trend of the pair is concerned. The rate is trading below the blue downtrend line, but we need to see if the sellers are strong enough to overcome the 1.3500-1.3475 zone before expecting larger bearish extensions in the future.

• Support: 1.3500 (S1), 1.3475 (S2), 1.3400 (S3).

• Resistance: 1.3580 (R1), 1.3650 (R2), 1.3700 (R3).

USD/JPY emerges above 101.40

USD/JPY moved higher, breaking above 101.40 (resistance turned into support), and is now trading near the 50-period moving average. I still expect the rate to go for another test near the 101.80/85 (R1) zone. The RSI moved above 50, while the MACD, although in its bearish territory, crossed above its trigger line, supporting the notion for the continuation of the upside wave. However, the pair is still trading within the purple downside channel and as a result, I would consider the overall short-term path to remain to the downside and any advances within the channel as corrective waves.

• Support: 101.40 (S1), 101.10 (S2), 100.80 (S3).

• Resistance: 101.85 (R1), 102.25 (R2), 102.65 (R3).

EUR/GBP in a consolidative mode

EUR/GBP moved in a consolidative mode on Monday, remaining between the support of 0.7915 (S1) and the 50-period moving average. Although the overall trend remains to the downside (marked by the downtrend line drawn from back the 11th of April), on the daily chart, I see positive divergence between our daily momentum studies and the price action. This keeps alive the scenario of an upside corrective wave in the near future, maybe towards the 0.7980 (R1) zone or near the blue downtrend line.

• Support: 0.7915 (S1), 0.7890 (S2), 0.7815 (S3).

• Resistance: 0.7980 (R1), 0.8030 (R2), 0.8080 (R3).

Gold somewhat higher

Gold moved slightly higher after finding support at the 1305 (S1) level, which coincides with the 200-period moving average. If the bulls are strong enough to continue the rebound, I would expect them to target once again the resistance of 1325 (R1). However, our momentum indicators keep providing neutral signals. Both the RSI and the MACD lie near their neutral levels, pointing sideways. Moreover, on the daily chart both the 50- and the 200-day moving averages are pointing sideways, adding to the unclear picture of the precious metal.

• Support: 1305 (S1), 1293 (S2), 1285 (S3).

• Resistance: 1325 (R1), 1332 (R2), 1345 (R3).

WTI surges again

WTI rallied on Monday, confirming our expectations for a possible rebound and a higher low near the 102.60 (S2) barrier. The price reached and broke the 103.90 hurdle and found resistance a few cents below the psychological barrier of 105.00 (R1). Such a move confirms a forthcoming higher high and keeps the short-term bias to the upside. A decisive violation of 105.00 (R1) could trigger extensions towards the next resistance at 106.05 (R2). Nevertheless, zooming on the 1-hour chart, the RSI exited its overbought territory and the MACD seems ready to fall below its signal line. Moreover, I see negative divergence between both our momentum studies and the price action. As a result, I cannot rule out another round of profit taking before the longs take control again. In the bigger picture, the 14-day RSI moved above 50, while the daily MACD crossed above its signal line, magnifying the case for the continuation of the short-term uptrend.

• Support: 103.90 (S1), 102.60 (S2), 101.70 (S3).

• Resistance: 105.00 (R1), 106.05 (R2), 106.85 (R3).



Source: https://www.ironfx.com/en/research-and-analysis/fundamental-analysis_22_07_2014
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