Friday's FX Outlook
IronFX Strategy Team | Dec 27, 2013 06:56AM ET
• EUR/USD moved significantly higher violating the 1.3710 barrier (yesterday’s resistance). The pair seems to follow a new support trend line and we might see the rate challenging once again the area between 1.3800 (R1) and 1.3830 (R2). The RSI broke above its blue resistance line, while the MACD poked its nose into the positive area. The rate is once again above both moving average, shifting the odds for further advance.
• Support: 1.3710 (S1), 1.3625 (S2), 1.3540 (S3).
• Resistance: 1.3800 (R1), 1.3830 (R2), 1.4170 (R3).
• EUR/JPY managed to escape from its sideways path, breaking above the 142.80 ceiling (today’s support level). I expect the advance to continue towards the 147.00 (R1) area. The 50-period moving average remains above the 200-period moving average, providing reliable support to the price action. My only concern is that the RSI lies within its overbought zone and a price pullback upon its exit cannot be ruled out.
• Support: 142.80 (S1), 140.88 (S2), 139.67 (S3).
• Resistance: 147.00 (R1), 150.00 (R2), 156.77 (R3).
• GBP/USD violated the 1.6395 hurdle and is now heading towards the highs of 1.6465 (R1). An upward break of that obstacle may signal further advances and target the next resistance at 1.6570 (R2). The price is trading above both moving averages, while the MACD oscillator lies above both its zero and trigger lines. On the other hand, the RSI entered its overbought area, thus a downward corrective wave in the near future should not surprise us.
• Support: 1.6395 (S1), 1.6320 (S2), 1.6260 (S3).
• Resistance: 1.6465 (R1), 1.6570 (R2), 1.6735 (R3).
• Gold moved higher yesterday but the advance was halted by the 50% retracement level of the prior bearish wave. Since the precious metal is trading below the blue downtrend line and the 50-period moving average remains below the 200-period moving average, I consider the recent advance to be an upward corrective wave. Only a violation of the trend line and the resistance at 1224 (R2) would be a reason to reconsider our analysis.
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• Support: 1187 (S1), 1180 (S2), 1155 (S3).
• Resistance: 1212 (R1), 1224 (R2), 1251 (R3).
• WTI remained where we left it yesterday. The price is still testing the 38.2% Fibonacci retracement level of the prevailing downtrend, confirming the validity of that hurdle. An upward violation of that level followed by a break of the 100.00 (R1) round number may signal the continuation of the uptrend. On the other hand, a failure to overcome that barrier may be a first sign that the recent advance was just a 38.2% retracement of the prevailing downtrend.
• Support: 98.90 (S1), 97.25 (S2), 95.35 (S3).
• Resistance: 100.00 (R1), 101.10 (R2), 103.15 (R3).
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