GBPUSD:
The GBP has now broken free of the prior high and has converged on the 200 day moving average. The GBP has not traded above the 200 day MA since late January. A close above the 200 day MA followed by a close above the 50% Fibonacci Retrace will most like push the GBP back above a 1.60 handle. We drew the Fibonacci Retrace from 2009’s high to 2010’s low. Only a close below trend line support followed by a close below the prior low would cause GBP bears to start looking at any new short positions.
NZDUSD:
Price action took the NZD all the way up to .7400 before retracing it’s intra-day gains. Although this candle is often associated with a reversal pattern since buyer exhaustion appears to have kicked in, there are other analysis that suggest the NZD rally is legitimate. The NZD broke above the last prior high before the strong Dollar rally ignited, thereby negating the USD strength. Furthermore, we have completed the third step in the Step chart pattern, whereby higher highs and higher lows are realized. Lastly, the NZD is trading well above its 200 day MA. Traders looking to go long at this point will be buying on the dips.
GOLD:
We have been discussing this move for quite some time as Gold has looked extremely vulnerable as it trades the technicals with near precision. Once Gold plummeted through the 50 day MA (see blue arrow) it was unable to recover. It tried several times to retake the 50 day MA but was unable to break back above the Fibonacci 23.6% Retrace level. Although highs on 3 separate candles touched the 50 MA, it could not manage a close above that level. Gold then fell to the 100 day MA on Monday which coincided with the Fibonacci 38.2% Retrace level. Yesterday’s price action, sparked by the breach of the 100 MA and 38.2% Retrace level pushed Gold lower by more than $20 an ounce. The next major move lower is setting up near the 200 day MA as it is on a collision course with the 50% Retrace level and price. A close below those 2 levels should generate price action similar to what we saw yesterday when price, the 100 MA, and Fibonacci 38.2% level on converged on the same handle to form a big drop in price.
Written by bforex.com
