Yesterday market event finally took the expected turn the one we were talking about for entire week. USD dollar got mercy and produced a sign of weakness. Now it is much more interesting to analyze the markets and look into the future moves. No matter how strong USD bulls are they cannot drug the market higher without any break. Over the past few months, euro pullbacks against the US dollar have been a constant phenomenon. Only in the last three months, we have observed four large-scale EUR / USD pullbacks from a significant market zone 1.1260-1.13000. The market likes such scripts and focus on them, the market generally loves chart history, and has the ability to act on the script. Tuesday's bullish reversal set the stage for another bounce after the single currency broke through Monday's high, completing a sequence of seven consecutive days in the red.
EUR / USD - bulls seized the initiative
The first half of February, EUR / USD showed a stable decline, after reaching the level around remarkable high 1.1515 at the end of January. We have expected at least technical pullback after the market broke through 1.1355. However, the market dipped to area 1.1265-1.1300- impressive six red days. This is the zone of base support level for middle-term sideway range. Yesterday, the sellers were finally stopped and forced to take profits, but what is more important is that the market updated Monday highs. It is a good sign for Euro bulls. Now market events can develop quickly, although local support is located in area 1.1315, the real demand area is somewhat lower 1.1300. The resistance that bulls need to overcome in order to confirm their willingness to control the market in the short term is area 1.1345-1.1355.
Trading recommendations – longs in area 1.1315, 1.1300
GBP / USD - market support in the area of 1.2840-1.2845
Amid American currency adjustment, British pound received some support bouncing off from the level of 1.2840. However, in recent days, the British currency has shifted to a new range, 1.2940-1.2830. And most likely the market will continue to consolidate in this range. Given Brexit risks , it is unlikely that the GBP / USD market will be able to return above 1.2930 in the nearest trading session. However, longs in case of pullbacks to the zone 1.2840 should be used to open longs.
Trading recommendations- longs in area 1.2840
Gold accumulates market volume, longs are still relevant
No significant changes in the market happened despite the strong weakening of the US dollar. It is interesting that in recent weeks, gold acted mostly independent from USD dollar, although the dollar was and is a strategic influence factor for the dollar. At the same time, locally, gold continues to accumulate volume, which will serve as a basis for the market to grow to the region of the nearest local maximum, $ 1323- $ 1325th zone
Trading recommendations longs in the current market area 1305-1310
US dollar index - the long-awaited correctional pullback
Yesterday, the dollar finally realized the correctional pullback that was expected by entire market community as overbought conditions were evident. USD dollar index updated its annual highs in the area of 96.85 points and then moved to a decline. At the same time, the fact that the market did not refresh Monday lows is alarming, since this fact should be regarded in favor of just a profit-taking, rather than a market reversal. However, in the coming days we will see a rich information background, both in terms of statistics and in terms of geopolitical news. Market volatility may gain and the dollar will be in the spotlight. Closest support for the market - 96.40 points zone, resistance is located around 96.64. Stay out of the market and watch these two levels.
Trading recommendations - out of the market
Oil - the market is ready for a powerful soar
An interesting technical situation is emerging on the Brent oil market. The market has been in narrow consolidation for five weeks. Many times Brent approached the resistance level (zone 63.40-63.65) but with no results, while the market did not have enough strength for a decisive assault. In recent days, the technical configuration in this market has changed, the bulls have accumulated enough volume to storm this resistance. We expect a fairly strong breakthrough of this market, at least in the $ 67 zone in case more USD dollar weakness.
Trading recommendations – go longs at current levels