Last week we talked a lot about the unstable, unidirectional nature of the markets, a trend that has moved into the current five-day period. It is characteristic that USD dollar impressive growth and the risk-off mode, that emerged again, has not yet led to strong sale-off in equities. We are yet to see a large bunch of economic data on Thursday and economic concerns would probably return to the agenda and influence stocks market. On Tuesday, in early European trading, no signs of American dollar weakness, despite overbought conditions.Today the focus of the markets upon BOE Governor Carney and Fed Chairman Powell speeach
EUR / USD updated yearly lows, the focus is upon mark 1.1215
New week brought new sales of European currency. Sellers have full control over this market now. Yesterday, the market began to break through the strategic support 1.1300-1.1265. Contrary to the hopes and expectations, the market passed this technical area fairly quickly. Today, the pressure continues and the market is testing the lower zone of this area - a mark of 1.1265. Below this area, the mark 1.1215 is located in close proximity. Then the bulls have no strongholds, and the path to the 1.1000 area will be open. Today we are watching this mark 1.1215. However, until two four-hour candles closure below 1.1265, we cannot recommend going short in current conditions. We also need to remember that the market is extremely oversold.
Trading recommendations - out of market
GBP / USD - the market fell to lows last week
The expected GBP pullback did not happen - the market moved to decline and pushed through support 1.2900 on the move, dropping to the lows of last week. Now this level 1.2810-1.2840 is a strong resistance area for the market. As a rule, there is a preliminary pullback after market directional impulse. However, Monday session showed that the pressure on the market is so strong that this pullback is minimal. Thus, the optimal zone for going short is area around 1.2880.
Trading recommendations - sales when pulling back to 1.2880
Gold maintains a positive technical configuration.
On Friday, buyers were able to close the trading week above the level 1310, and now local support is located in the area 1307-1308. The resistance level of gold market is located around 1315. But of course, the strategic line of defense remains the same - this is the area of the market 1300-1295. Any decline in this area should be used to open longs.
Trading recommendations - longs in the area of 1295-1300
US dollar index
US dollar overbought conditions are increasing, but in terms of risk-odd mode, the markets use the dollar as a protective asset. The current fundamental situation can support the dollar for a very long time, yesterday dollar index broke the level 96.60 and further 96.80. This is another level of resistance for the market. Now we can expect USD dollar index surge to 2018 maximums around 97.60 points.
Trading tips – out of the market