Key Economic Data - Coming Up Today(All Times GMT+3)
The EURUSD declined from above 1.2500 yesterday and has presently reached as low as 1.2430. The pair has been attempting to hold above 1.2500 and break above the next area of resistance at 1.2600. Over the last three weeks the EURUSD has risen above 1.2500 nine times and fallen back into the 1.24s and 1.23s. There is a double bottom at 1.2358 and the pair is within 1% of retesting this support area. We had been in a near-term uptrend since 23 of Nov although now this uptrend has been technically broken with the breach below 1.2444 and if the level of 1.2402 is also broken to the downside this will signal an increased possibility that the price will cave in and make new lows. A potential break below 1.2357 will create new yearly and two-yearly lows and could lead to margin calls and euro selling that will force the pair within reach of the 1.2000 level. This is particularly the case given that we are coming into the last month of the year and new lows will push longs into an uncomfortable position. Over the last week the EURUSD had benefitted from weak US economic data releases and made some gains although yesterday's new lows in Crude Oil weighed on the EURUSD. This week US announced stronger than anticipated GDP data while all the rest of the data points on the economy have been weak. WTI Crude Oil has made new lows at $67.73 after Opec Meeting concluded without production and supply cuts. The US DJIA is still at all-time highs just above 17,830 following the Thanksgiving holiday and the USDJPY is back up as high as 118.25 and is targeting the recent high at 119.
The RSI on the EURUSD Weekly Chart has crossed back below 30 and appear to have failed in its latest attempt to push above 30. Readings of 30 and below on the RSI are considered oversold and this could raise the possibility of a near term recovery in the pair. The next move will be to see if the RSI stabilizes and moves higher or if it will fall back towards the reading of 15 made in September this year. The EURUSD has declined for each of the last 4 months and at 1.2430 is down for a fifth month in November also.
At present the Euro is under pressure with the pair below 1.30 and still trading below the downtrend channel as seen in the H4. As long as the pair remains below 1.30 and below the downtrend channel, the bias remains bearish. - This has been our consistent outlook for three months. The pair has been below the key 1.30 level for eight consecutive weeks. To change the trend the EURUSD must consolidate above 1.2500 and rise above 1.2883 raising the prospects of a near term upside correction in the pair following months of declines. Last week's weekly close below 1.2500 after holding above this level for most of the week sent a bearish signal to investors.
EURUSD Support areas include 1.2358, 1.2335, 1.2300, 1.2200, 1.2150. Resistance levels above are at 1.2600, 1.2700, 1.2845, 1.2800, 1.2900 & 1.30.
EURUSD 5 Minute Chart
EURUSD 4 Hour Chart
EURUSD Pivot Point Table
Gold sunk to the $1180 key support level and thus far has held just above the support at $1181 an ounce. The decline follows three weeks of gains which took Gold from $1130 to the highs of $1208 on Friday last week. Over the five days of this week the range on Gold is $1181-$1203. The price is now at $1185.18 and the wider 7-day range remains between $1173 - $1208. Since the start of this week the price has moved only $22 from high to low in what is large reduction of volatility in comparison to the last 4 weeks. Technically it was significant that Gold opened the new week just above $1200 an ounce. A failure to close above $1200 this week is bearish, whilst to come back from this level on Friday morning at $1185 and close above $1200 today will add momentum to the recent recovery. To the downside $1180 is an important support followed by $1174, $1145 and $1130. Gold suffered yesterday as WTI Crude Oil made sharp declines losing over 5% in one day and the USD strengthened against major currencies including the Euro and Yen. Most commodities declined yesterday and this weighed also on Gold. The recent decision by the Fed to end the asset purchase program and the move towards increasing interest rates in the US have reduced demand for Gold investment. Silver fell 1.2% to 16.0507.
December will be key to determining if Gold can recover up above $1200 and continue to erase some of this years losses. Gold opened the year at $1205 an ounce and therefore is only 2% down for the year. In the early months of this year Gold had advanced as high as $1388 an ounce and as such is $200 off the yearly highs for 2014. With a just over a month until the end of this year it is integral to see if Gold closes higher or lower than the Jan 1st 2014 level. Between 1999 and 2013 for 14 consecutive years the price rose year to year. In 2013 the price opened the year at $1674 and closed at $1205 posting a first yearly loss in 15 years. Therefore it is key to see if the year to year loss extends into a second year of if Gold can shrug of 2013 as a bad year and recover back up towards the 2011 all-time high of $1921.
Gold prices have fallen from $1345 an ounce in August to as low as $1130 in November, erasing $215 from the value of Gold. The $1180 area remains the key to a recovery in Gold which is down from above $1900 in 2011. Gold had advanced from $245 an ounce in 1999 to $1921 in 2011 posting 12 years of straight gains. Now the market has leveled off. Now the price is above $1180 the odds of a recovery are improved, if the price slips below $1180 the outlook turns bearish.
Support levels for Gold can be seen at $1180, $1160 $1140, $1130, $1125, $1115, $1100. Resistance to the upside materializes at $1195, $1205, $1215, $1225, $1235, $1240.
Gold 5 Minute Chart
Gold 4 Hour Chart
Gold Pivot Point Table