Viral Outbreak In China Has Gold Returning To Recent Highs

• 30 Jan 2020

USD/JPY

The USD/JPY pair has broken several support levels and is now testing the 108.83 price line as the pair returned to a previous trading range between the 108.06 and 109.61 price levels. A stall in the bearish move has been replaced with further selling activity. Momentum indicators have downward trajectories with RSI approaching oversold conditions.  

 

 

 

 

EUR/USD

The Eurodollar has broken the ascending trendline in emphatic fashion with strong selling activity. The bearish move has decelerated and is currently testing the 1.102 support level. The break is significant as bullish rebounds have generally taken place at or around the trendline. Momentum indicators have stalled in bearish territory. 

 

 

 

GBP/USD

The GBP/USD pair has begun a downtrend, as denoted by the descending trendline, indicating that initial optimism around Brexit has waned. Bearish moves have been stalling just above the 1.295 price line in recent trading, indicating the support level is strong and may form a price floor going forward. Momentum indicators are neutral if slightly bearish.

 

 

 

USD/CHF

The USD/CHF is complete with price action moving back above the 0.971 resistance level. Despite the break, selling pressure has risen, resulting in a gravestone doji indicating a bearish reversal may be on the cards. Momentum indicators have stalled in neutral/bearish conditions.  

 

 

 

USD/CAD

USD/CAD buyers have returned to take price action to test the 1.319 resistance level, indicating the end of a recent, sharp downtrend. A break above this resistance level would indicate the pair has returned to a previous trading range between the 1.319 and 1.333 price levels. Momentum indicators are bullish with RSI approaching overbought conditions. 

 

 

 

SILVER

Silver has continued the bearish move towards the 17.42 support level where buyers returned. Although lacking conviction, buyers may take price action back towards the 17.73 resistance line. The current price channel between the two price levels was maintained for a significant period of time in previous trading and this may be the case going forward.  Momentum indicators also have bearish trajectories.  

 

 

 

GOLD

Gold has returned to previous price highs reached during a period of geopolitical tensions and is considered a safe haven asset in times of risk in the markets. A viral outbreak in China has contributed to investors’ fears. The metal is yet to push beyond this price level and create a new high. Momentum indicators have stalled in overbought conditions. 

 

 

 

OIL

WTI has failed to clear the 54.10 resistance level which represents a support area. The most likely course for the commodity is back to the 52.17 support level which has been tested but not breached in recent trading. There is currently low risk appetite taking WTI closer to $50 per barrel. Momentum indicators have flattened in oversold conditions.