Currency Highlights | April 2019
17.04.2019
British currency looks pretty stable despite a great deal of news relating to the Brexit.

EUR/USD

The EURO rallied significantly during last week, using the 1.12 level as massive support yet again. The fact that we have seen this rally suggests that we will stay within this range, but that doesn’t necessarily mean that it’s going to be the easiest trade to hang onto.

However, if EURO can break above the 1.15 handle on a weekly close, then a longer-term traders will come in and start buying and aiming for the 1.18 level. The 1.12 level continues to prove it’s resiliency, and therefore should be respected. If we were to break down below that level significantly, then the market is very well open to the idea of going down to the 1.10 level. It would not only be breaking a major support level but would also be breaking the 61.8% Fibonacci retracement level, something that doesn’t happen every day on the weekly charts. Obviously, that would be a very bearish turn of events.

 

USD/JPY

The US dollar has gone back and forth to kick off the week on Monday, as we are right at a major round figure. Overall, this is a market that is trying to break out and it is highly correlated to the S&P 500 which is also trying to do the same.

The Dollar went back and forth during the trading session on Monday, as the rate continues to bounce around the ¥112 level. This is the very top of the major resistance barrier that the rate has been pressing for some time. As we have seen this market go back and forth in this area as it shows resiliency as far as the buyers are concerned, and it’s very likely that we are going to see an eventual break out based upon the candlestick shape of the last several days. We have also seen a bit of a “golden cross” over the last couple of days, which of course is a very bullish sign. All things being equal, it does look as if the buyers are starting to take control.

 

GBP/USD

The Pound is growing against the USD early in another April week. Overall, the British currency looks pretty stable despite a great deal of news relating to the Brexit.

Last week, the United Kingdom agreed with the European Union on six more months for hammering out all details in the documents without the hustle and bustle and finally exiting the alliance. At first, London asked for a delay until June 30th, but the European Union, being sick and tired of all Brexit-related complications and hype, gave more time than the UK initially wanted.

At the same time, both parties agreed that any delay would have a solid reason to be reviewed and processed.

Despite more or less clear Brexit date, this topic remains rather controversial for global capital markets. Investors are afraid that all these delays (mostly due to British lords’ “holier-than-thou” attitude) may push the Brexit procedure in the direction that is completely different from where the British people wanted it in the first place.

Nevertheless, there is no guarantee that with six additional months the British Parliament will use them to find a perfect solution instead of rejecting new versions of the agreement with the European Union.

In the daily chart, the Pound is consolidating around 1.3125. Oscillator indicates that the downtrend may continue towards the downside border of the range at 1.2950. If later the price breaks this level, the pair may continue falling to reach 1.2750.

 

GOLD

Gold markets continue to go sideways overall, as we hang about a large come around, psychologically significant number. Beyond that, we have a significant exponential moving average at this area as well.

Gold markets went back and forth during the trading session on Monday, as we continue to see a lot of interest in the $1300 level, an area that of course is psychologically important. Beyond that, we have the 50 day EMA just below that level, so it should offer a significant amount of support as well. Ultimately, the $1275 level underneath is massive support based upon the previous bounce, and of course the 200 day EMA which is just below there. In other words, we believe that there is a lot of support underneath and therefore it’s likely that the market will continue to find buyers on dips.

 

BITCOIN and ALTCOINS

Since our recent BTC analysis, Bitcoin has been hovering on top the $5000 significant support zone, with no success of breaching the next key resistance of $5200.

This time we saw a sharp move down, breaking the $5000 but surprisingly quickly correcting up (after touching $4940 on Bitstamp). What can be learned is that the situation is still very fragile. But after all, we still see the bulls quite strong on top the $5000 support. The glide below $5000 was quickly filled up with demand. The $5000 war is still going as of writing these lines.

The critical level here is the $5000 support area, which so far holds up nicely. Bitcoin completes ten days of holding up above the $5000 mark. However, the situation might change any time: In case of breaking down, further support is located at ~$4930, before reaching the $4800 zone. Below lie the $4700 and the 200-days moving average line (1-day chart) which is currently around $4500. Looking at the bigger picture, as long as Bitcoin maintains the $4200 area, the chances that we have seen the bottom of the current bear market are very high.

From above, the nearest major resistance lies at $5200. Further resistance area level lies at $5200, before reaching the $5300 – $5350 area. The next significant resistance lies at the past week’s high around $5500 before getting to the 2018 legendary support turned resistance line at $5700.