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XAU/USD: gold quotes are correcting
Current trend
Gold quotes are consolidating around 1919.00.
As expected by most experts, the price of the precious metal has shown significant growth since the beginning of the year, and despite yesterday's decline, it remains fairly high. Undoubtedly, the strengthening of quotes is directly related to the situation around the coronavirus pandemic: the recent introduction of additional restrictions in a number of countries have pushed investors to avert risk and seek "safe havens".
However, the transition to gold was not that significant. Since mid-December, the precious metal has a new competitor, Bitcoin. It was cryptocurrency that some institutional investors began to consider as a more reliable means of fighting inflation. Bitcoin is growing, and not only preserves assets but also brings very high profitability, which makes some investors, who have always kept their funds in gold, to make a short-term choice in favor of cryptocurrency.
Support and resistance
Quotes, which left the global descending channel yesterday, attempted to test the resistance line, after which growth may continue. Technical indicators continue to show a buy signal. Fast EMAs on the Alligator indicator are higher than the signal line, and the AO oscillator histogram is trading in the positive zone.
Resistance levels: 1951.0, 2067.0
Support levels: 1886.0, 1774.0.
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EUR/USD: EUR is corrected
Current trend
EUR is declining insignificantly against USD today, developing the "bearish" signal that formed the day before.
Noticeable pressure on EUR was exerted yesterday by macroeconomic statistics from the eurozone, which came out worse than expected. The volume of Retail Sales in November fell by 6.1% MoM after rising by 1.4% MoM in the previous month. Analysts had expected negative dynamics, but counted on a decrease by 3.4% MoM. On an annualized basis, sales fell by 2.9% YoY, while the forecasts were for an increase by 0.8% YoY. The data on consumer inflation were also negative. In December, the Consumer Price Index fell by 0.3% YoY, repeating November dynamics. Analysts had expected a slight improvement in the indicator to –0.2% YoY.
Today, European investors are focused on the statistics on Industrial Production from Germany for November, as well as on the Unemployment Rate in the eurozone for the same period.
Support and resistance
In the D1 chart, Bollinger Bands are reversing horizontally. The price range is trying to consolidate, while remaining spacious enough for the current activity level in the market. MACD is going down having formed a new sell signal (located below the signal line). Stochastic is showing similar dynamics, signaling the presence of significant "bearish" potential in the ultra-short term.
Existing short positions should be kept in the short and/or ultra-short term until the signals from technical indicators clear up.
Resistance levels: 1.2271, 1.2309, 1.2348, 1.2400.
Support levels: 1.2234, 1.2200, 1.2150, 1.2087.
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EUR/USD: wave analysis
The price may fall.
On the daily chart, the first wave of the higher level 1 of (3) developed, within which the fifth wave v of 1 formed. Now, a downward correction is starting to develop as the second wave 2 of (3), within which the wave a of 2 is forming. If the assumption is correct, the pair will fall to the levels of 1.1976–1.1890. In this scenario, critical stop loss level is 1.2352.
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XAG/USD: wave analysis
The pair may grow.
On the daily chart, the first wave of the higher level 1 of (3) formed, a downward correction developed as the wave 2 of (3), and the formation of the wave 3 of (3) started. Now, the first entry wave of the lower level i of 3 has formed, and the local correction has ended as the wave ii of 3. If the assumption is correct, the pair will grow to the levels of 28.00–29.73. In this scenario, critical stop loss level is 24.18.
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AUD/USD: wave analysis
The pair may grow.
On the daily chart, the wave C of the higher level develops, within which the first wave (1) of C forms. Now, the third wave of the lower level 3 of (1) is developing, within which the wave iii of 3 has formed, the local correction iv of 3 has ended, and the fifth wave v of 3 is developing. If the assumption is correct, the pair will grow to the levels of 0.7900–0.8100. In this scenario, critical stop loss level is 0.7660.
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EUR/USD: the pair declines again
Current trend
The EUR/USD pair declines, trading around the level of 1.2146.
Yesterday, the European currency strengthened against its main competitors after the publication of macroeconomic statistics. The volume of industrial production in the EU for November rose by 2.5% MoM against the expected growth of 0.2% and adjusted to –0.6% YoY against the background of forecasts of –3.3%. The volume of industrial production in Italy for the same period remained rather low and amounted to –4.2% YoY, which is still better than the forecast of –4.3%.
After a slight downward correction, the American currency returned to the upward dynamics, which determined the instrument's trend. Although the main news is the possible impeachment of US President Donald Trump, experts call the likelihood of this event almost zero since the Senate, most likely, will not take this responsibility.
Support and resistance
Locally, the price left the uptrend, breaking the support line. After a short correction, it is ready to go below the local minimum. Technical indicators maintain a stable sell signal. The fluctuation range of the EMA on the Alligator indicator is expanding, and the histogram of the AO oscillator is trading in the negative zone.
Resistance levels: 1.2218, 1.2310.
Support levels: 1.2130, 1.2000.
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Brent Crude Oil: wave analysis
The price may grow.
On the daily chart, a downward correction of the higher level developed as the wave B, and the upward wave C started to form, within which the first wave 1 of (1) of C develops. Now, the third wave of the lower level iii of 1 is forming, within which the wave (iii) of iii is developing. If the assumption is correct, the price will grow to the levels of 59.92–65.00. In this scenario, critical stop loss level is 52.11.
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WTI Crude Oil: wave analysis
The price may grow.
On the daily chart, a downward correction of the higher level developed as the wave B, and the formation of the upward wave C started, within which the first wave 1 of (1) of C develops. Now, the third wave of the lower level iii of 1 is forming, within which the wave (iii) of iii is developing. If the assumption is correct, the price will grow to the levels of 60.00–65.50. In this scenario, critical stop loss level is 46.89.
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EUR/USD: wave analysis
The pair may fall.
On the daily chart, the first wave of the higher level 1 of (3) developed, within which the fifth wave v of 1 formed. Now, a downward correction is developing as the second wave 2 of (3), within which the wave a of 2 is forming. If the assumption is correct, the pair will fall to the levels of 1.1976–1.1890. In this scenario, critical stop loss level is 1.2219.
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XAU/USD: gold is in demand again
Current trend
Gold prices are rising significantly during today's Asian session, updating local highs of January 15. The instrument is testing the level of 1850.00 for a breakout. Noticeable pressure on USD was exerted by the speech of the candidate for the post of the US Treasury Secretary Janet Yellen, who spoke in favor of a gradual return of the "strong dollar policy". In any case, it seems that the Joe Biden administration will not engage in artificial weakening of the national currency, as well as prosecute other countries for such actions. In addition, investors are looking forward to Biden's inauguration today, and also expect quick decisions on the announced USD 2 trillion support package for the US economy.
Support and resistance
Bollinger Bands in D1 chart demonstrate a stable decrease. The price range expands from below, weakly reacting to the appearance of ambiguous trading dynamics in the nearest future. MACD is reversing to growth forming a new buy signal (located above the signal line). Stochastic keeps its upward direction but is rapidly approaching its highs, which reflects the risks of overbought instrument in the ultra-short term. Technical indicators do not contradict the further development of the uptrend in the short and/or ultra-short term.
Resistance levels: 1850.00, 1863.34, 1875.09, 1900.00.
Support levels: 1830.00, 1811.96, 1800.00.
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