The EUR/USD pair fell during trading session on Friday, but found enough support at the 1.0750 level to turn these around to form a hammer. Today market gaped up. So pair seems to be free to go to the 1.09 handle, and then eventually the 1.10 level above that. Pullbacks should continue be buying opportunities untill we see an exhaustive candle. The dollar has weakened across the board because of the fact that the Trump team could not push through the healthcare bill and this supports EUR bulls as well.
Gold markets finally reached $1240 level. I see a bit of resistance above, but I do believe we will see bullish pressure and pullbacks will offer buying opportunities. I think gold market will reach $1260 level given enough time and even higher. I see the floor of this market at $1200. If we will break down this level, then things could change rapidly. But I don’t think this scenario will take place, as Fed decision interest rate last week suppurts upper trend.
Also supporting gold is Trump’s failure to deliver his promised tax cuts and regulatory reform. Finally, investors were looking ahead to the Group of 20 finance leaders’ meeting in Germany this weekend. Experts say the Trump administration may try to pursue protectionist policies which could increase demand for gold as a safe haven investment.
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Brent markets fell last week, reaching down below the $53 level that is the signal we are going to reach the $50 level. That’s why, I believe it’s only a matter of time before we sell off below there as well, but it could cause a bit of a bounce. Any way I am waiting for good moment to open short positions, not long, because the supply issue continues to be a major issue, and with that it’s likely that we will continue to see sellers coming back into this market. I do believe the market has all chances to reach the $40 level, but that obviously is a longer-term move.
The markets should continue to go lower, as people begin to accept the fact that even major players like Exxon are starting to talk about oversupply been an issue for the long term.
WTI Crude Oil
The WTI Crude Oil fell as well, breaking the $50 level. Finally we went out of the range, and I believe market will continue to go much lower, perharps reaching the $45 handle. How to enter the market? I expect short-term rallies to be selling opportunities, and I believe that the $45 level will be targeted initially or even lower. The oversupply has finally taken over the attitude of the market. Anytime this market rallies, I think it’s only a matter of time before we sell off. Even though the OPEC production cuts have been front and center, we have not seen a massive reduction in supply. Quite frankly, it has gone the other way and OPEC has lost its ability to control the market.
DAX gapped lower on Friday, but on results of week It sliced through shooting star from previous week. The 11,650 level underneath seems to be the “floor” in this market and I believe it will attract buyers into the market. I’m waiting for a supportive candle or a bounce to set longs in such a strong uptrend and believe market will reach 12 400 level given enough time.
Germany is main EU economy and good reports attract more buyers. So, I believe pullbacks should offer value and market will continue its uptrend, as most of other EU indexes.
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Gold markets initially fell during the day on Wednesday, but found enough support to keep the market afloat. If we can break above the top of the candle for the day, we should then reach towards the $1250 level. I believe that this market has plenty of support all the way down to the $1200 level, so I have no interest in shorting. We are currently hovering the 50% Fibonacci retracement level, and thus it’s likely that the market will see participants interested in both directions.