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The GBP/USD has rallied a bit during the week but continues to show signs of exhaustion above the 1.24 level. This is the 3rd week in a row that sellers have come in to punish the pound, so I think we are about to reenter the consolidation area. Obviously, if the market were to break above the 1.25 level, then it could open up a move to the 1.2650 level, possibly even the 1.30 level. All things being equal, I think there’s a situation where we probably head back into the previous consolidation rectangle.
The EUR/USD initially pulled back during the week but recovered quite a bit to in the week near the 1.10 level. This is a psychologically significant figure and is probably worth noting that the candlestick for last week also approached the 200-Week EMA, so we are most certainly in an area where a lot of attention needs to be paid. If we can clear that barrier, then it’s likely that the British pound goes to the 1.1250 level, and then possibly the 1.15 level above. Underneath, if we were to break down below the bottom of the weekly candlestick, then we could go down to the 1.08 level, perhaps down to the 1.06 level after that.
The USD/CAD has had a strong week against the Canadian dollar, which of course has been suffering at the hands of a falling crude oil market. With that being the case, looks like we’re simply going to continue to bounce around between the 1.1 the bottom in the 1.38 level on the top. Consolidation should continue to be the main theme here, as the 2 economies are so heavily intertwined. If we were to break above the 1.38 level on a daily close, then we may have a move toward 1.40 happening.
The AUD/USD has initially tried to rally during the trading week, but for the 4th week in a row, we have seen the sellers come in and push the Aussie down. In other words, this remains a “fade the rally” type of market until something drastically changes. The 50-Week EMA sits just above the 0.68 level, which is where the resistance barrier currently resides. Because of this, I think it’s going to be even more difficult to get above there, therefore I like the idea of shorting any signs of strength that we see. The 0.66 level should be supported, and if you break it down below there, things could go rather negatively.
The NZD/USD initially rallied slightly during the week but has since fallen quite hard. At this point, it looks like we are trying to break down below the 0.61 level, which could open up a move down to the 0.60 level, an area that would obviously have a lot of psychology attached to it. It’s also worth noting that we ended up forming a massive shooting star once we pierce the 50-Week EMA a couple of weeks ago and have seen negativity since that point in time. I believe fading rallies and perhaps even just flat-out shorting right away is the way to approach the Kiwi dollar.
The USD/CHF rallied to reach the 0.90 CHF level during the week but then turned around to show weakness yet again. We are getting close to a major block of support, and the Euro is also starting to try to break out at the same time, which of course has a huge negative correlation to this pair. If we turn around and take out the 0.90 level, then it’s likely that the Swiss franc gets hammered by the US dollar. That being said, based on the candlestick in the way that we drooped during the week, I think we are going to try to dig down toward the support which extends all the way down to the 0.88 level. We could spend some time consolidating between 0.88 and 0.90.
Gold markets have fallen a bit during the course of the trading week, as it looks like the $2000 level is going to be a bit too much in the spot market. It’s worth noting that we have formed a triple top of sorts, so if we were to take off to the outside and clear the highs of the previous week, that would be a huge victory. At this point, I think it’s more likely than not to be a situation where we could see a gold pullback in order to find a bit of value. Signs of support after a pullback should be jumped on, as it will end up being valuable, all things being considered.
The West Texas Intermediate Crude Oil market has fallen a bit during the trading week, reaching down toward the gap that occurred a couple weeks ago as OPEC announced a 1.6 million barrel cut to production. That being said, now that the gap has been filled, we have to determine whether or not there is enough buying pressure underneath to keep the market afloat. At this point, I suspect that we are going to see a lot of consolidation, between the $83.50 level and the $68.50 level. We are essentially in the middle, so we may get a short-term bounce, but I would not read too much into it.
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