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EURUSD – Will Euro/dollar bullish momentum continue?
The EURUSD has experienced a moderate rally in recent weeks, within the overall downtrend it has been in. Price broke up above 1.0670 key resistance last Tuesday and ended the week just above that level. If prices remain buoyant above 1.0670 we will likely see some more upside movement before 1.0875 resistance comes into play. Savvy traders could look for buying opportunities this week on weakness, targeting 1.0875 resistance. If price moves up to that 1.0875 level we would look to be sellers there. Stay tuned to our daily members market updates for developments and potential trade ideas on the EURUSD.
GBPUSD – Sterling/dollar false-break leads to bullish surge higher
The GBPUSD briefly broke down through 1.2100 support at last week’s opening, before pushing back up through it. We discussed that level in our recent commentaries, indicating that prices could bounce higher from there. What ended up happening was basically a false-break of that support, as prices quickly reversed and surged higher. Notice that prices even closed up above 1.2335 resistance, showing the conviction of bulls. This pair showed more bullish sentiment on Friday as traders rejected lower prices resulting in a small bullish pin bar. We could see more follow-through to the upside this week and savvy traders could look for buying opportunities whilst remaining cautious and aware of overhead resistance levels and that the long-term trend is still down.
EURGBP – Euro/Pound setting up for a potential sell-off
As discussed in our January 17th commentary, the EURGBP has been trending lower after topping out in October 2016. Notice the two giant event areas on the chart below, the market has experienced a vacuum back up to test these areas recently. We have a confluence of two factors that support a bearish bias under 0.8850 resistance area; Obvious strong resistance area at the previous event areas that are now containing the market, and an approximate 50% retrace of the initial swing lower, both of which we can see below. For bears, it all depends on the line in the sand at 0.8850; if price is below that containment level, we expect the market to trade lower. We are looking to be sellers on any pockets of strength and we would hold short positions until a strong break or close back above 0.8850. Downside targets are near 0.8340 or even lower potentially.
S&P500 – S&P500 consolidating but remains buoyant
Markets continue to cheer with optimism as Donald Trump became the 45th President of the U.S.A. However, this week, all eyes are on Dow 20,000 and the S&P500 recent all-time highs at 2277.00 area. Before the markets can continue higher, they must overcome these current hurdles.
The S&P500 consolidated again last week, but whilst above 2227.00 and 2170.00 key support, the bulls remain strongly in control and the multi-year bull market continues. It might be a good idea to wait for a breakout and close higher before looking for another long entry or we could wait for a more substantial pull-back into the 2227.00 support handle and look to get long there. Either way, this market is strongly biased to the upside and buying the dips remains the strategy of choice.
Crude Oil – Oil continues to look strong
As we’ve discussed in recent commentaries, the Crude Oil market continues to look strong. Notice that two recent bearish pin bars have not had any impact on prices, therefore a break above those pins could activate higher prices, we have a members-only lesson that discusses how to trade failed pin bars. Crude Oil is bullish above 49.30 and 50.80 and we remain opportunistic buyers until there’s a convincing close below 49.30 key support level.
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