European MarketsThis week Global markets dropped down and broke its accelerated short-term trends with Europe down 2.5%-3% and U.S. less than 1%. French Index CAC40 was the worst performer after sellers defended 4.500 resistance zone then broke bear flag wich caused strong move to 200 EMA on Daily chart. The last time we have seen price close to 200 EMA was on February 2014. From now, our new point of reference will be 4.277 low, above that we can see some digestion after quick move. If sellers want to be in control they should not give back more than 1/4-1/3 of this recent move. If price goes through this low, then we can see more selling pressure. In general, this pullback in markets from their macro trends still looks healthy and controlled. You should be aware what is your timeframe and navigate your own trades.
GBP/USDGBP/USD still acts well, holding near highs and building nice upper-level base. It broke up its intermediate downtrend on 12 of June and showed commitment holding above 8 EMA. Now it is very tight and feels that soon we will see resolution of this consolidation. But we need some type of catalyst and we have foe of them next week: Bank of England governor speaks on Tuesday and Unemployment Rate on Wednesday.
I prefer to see upside scenario — if price goes through 1.71700-800, then we can see some follow through as it was before. But I also keep downside scenario in my mind — break down of support at 1.71000 could trigger stops, next target could be 21 EMA at 1.70600. Major support at 1.69500.
USD/JPYUSD/JPY approached its major support and 200 EMA. From macro point of view we entered into this indecision at the beginning of 2014. Now, this pattern became really tight and looks ready to make a move. If price wil bounce form support zone (green rectangle) and will break trend line and previous swing high at 102.257, then we can enter into directional movement with first target to 104.000. But I have a feeling that it will resolve to downside as price is below all the key moving averages. Action point is 101.057, below that you can expect more selling.
GoldGold broke up from its two week's upper-level base. Now, it needs to hold up above $1,330 to keep active traders' attention. Then we have $1,306-$1,312 support area. Pivot high is $1345, above that expect more buying. Maybe we will see spring highs at $1,392 at some point this summer.
Next week we will have conferences from almost every Central Bank. Those events are important for investors and traders as they establish monetary policy of the country and help their economies to recovery from crises. Some are doing well like US Fed and Bank of England, thinking about exiting from those programmers. And some like ECB and Bank of Japan are at their active phase.
Here are these events:
- Monday, July 14 - ECB president Draghi Speaks;
- Tuesday, July 15 - Monetary Policy Statement from bank of Japan;
- Tuesday, July 15 - Bank of England Governor Сarney speaks;
- Tuesday, July 15 - Fed Chairman Yellen testifies;
- Wednesday, July 16 - Bank of Canada monetary policy statement.