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Technical Analysis – EUR/USD and Gold

gold and euro banknotes | Econ Alerts

Gold holds bullish short-term outlook above 1300 level

 

XAU/USD-H4 16/10/2017 | Econ Alerts

Gold is tracking higher after bouncing from the 1260.5 low and prices have been rising steadily since October 6. There is room for a further extension higher after a bullish signal was given by the crossover of the 20 and 50-period moving averages on the 4-hour chart.

While risk is tilted to the upside, the market may enter a consolidation phase at current levels in the 1300 handle. This is because the RSI indicator has reached overbought levels and is near 70.

Immediate support is now at the key 1300 level. If it holds and there is a push to the upside, prices would target 1315. Building on these gains would help strengthen momentum for a move towards 1335 and then re-test the 1357.47 peak. Clearing this level would allow for a resumption of the broader uptrend.

A drop below the key 1300 support level would dampen the near-term bullish outlook and shift the focus back to the downside. Next targets are at 1280 and 1260.59.

 

EUR/USD neutral; strong resistance at 50-day moving average

 

EUR/USD Daily 16/10/2017 | Econ Alerts

 

EUR/USD is neutral since the end of September after pulling back from 1.2091, the highest level since December 2014. The pair is consolidating below 1.1900 around the 50-day moving average. Near-term risk is tilted to the downside with immediate support at 1.1660.

EUR/USD is expected to remain soft. The recent recovery from the 1.1660 area lost steam and the market is now looking capped by the 50-day MA. Further declines would target 1.1470 and 1.1290 ahead of the key 1.1100 level.

Rising back above resistance at the 50-day MA at 1.1842 would see prices move up to the 1.1900 level, which if broken, would increase the odds for another extension towards the 1.2091 peak. From here, there would be a resumption of the uptrend from April, with scope to rise to the 1.25 area.

In the bigger picture, the upward trajectory of EURUSD from the 1.08 area stalled at 1.2091 on September 8. Prices have moved out of the rising channel. Trend strength is weak as indicated by the horizontal 50-day MA, while momentum signals are neutral. However, there is no indication of a trend reversal yet unless the market falls below 1.1400.

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source: XM

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