bforex
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GOLD:
Gold has been trading with relatively low momentum recently. It has had a hard time staying above the 50 day and 100 day moving averages. A close above recent Resistance at 1,140, which represents the Head of the Head & Shoulders chart pattern we discussed 2 weeks ago, would give Gold a resurgence of momentum. However, if Gold fails to stay above the 100 day MA then we look for it to close below the 50 day MA, currently below 1,110.
OIL:
Oil has been trading in a range since October 2009. The high of the range had been 85 while the low was 71.95. The high of the range represents Resistance while the low of the range represents support. Oil has managed to keep above its 50 day Moving Average since February. More importantly Oil broke though Resistance and hit a high of 86.90. The 50 MA has been trading below the 100 MA, usually a pattern associated with falling prices. However, the moving averages are upwards sloping which indicates prices are moving up but at a slower speed. Now that price has accelerated, the 50 day MA is set to cross back above the 100 day MA which may mean even higher Oil prices ahead. Remember that moving averages are lagging indicators, but are still very telling as averages are no less important.
USDCAD:
The Canadian Dollar is making another attempt to overtake the U.S Dollar. The CAD, as we have mentioned several times is a commodity currency whose price is directly influenced by the price of Oil. The Canadian economy is a large exporter of Oil. If you, as a trader think in terms of correlations, the price action on these 2 products makes perfect sense. We have also mentioned that parity, or a Dollar for Dollar, acts as a point of Resistance for any pair. Therefore a close below parity is psychologically important as it states the market is ready to support this price level. The opposite is also true as an inability to close above parity indicates the market is not ready to support the current price level. For those that trade Support and Resistance this is a seemingly optimal time to get in as the CAD is floating above $1. We have drawn trend line Support and Resistance, expect that if the CAD can not close below parity that it may bounce between trend line Resistance and $1 until the market moves forward.
Gold has been trading with relatively low momentum recently. It has had a hard time staying above the 50 day and 100 day moving averages. A close above recent Resistance at 1,140, which represents the Head of the Head & Shoulders chart pattern we discussed 2 weeks ago, would give Gold a resurgence of momentum. However, if Gold fails to stay above the 100 day MA then we look for it to close below the 50 day MA, currently below 1,110.
OIL:
Oil has been trading in a range since October 2009. The high of the range had been 85 while the low was 71.95. The high of the range represents Resistance while the low of the range represents support. Oil has managed to keep above its 50 day Moving Average since February. More importantly Oil broke though Resistance and hit a high of 86.90. The 50 MA has been trading below the 100 MA, usually a pattern associated with falling prices. However, the moving averages are upwards sloping which indicates prices are moving up but at a slower speed. Now that price has accelerated, the 50 day MA is set to cross back above the 100 day MA which may mean even higher Oil prices ahead. Remember that moving averages are lagging indicators, but are still very telling as averages are no less important.
USDCAD:
The Canadian Dollar is making another attempt to overtake the U.S Dollar. The CAD, as we have mentioned several times is a commodity currency whose price is directly influenced by the price of Oil. The Canadian economy is a large exporter of Oil. If you, as a trader think in terms of correlations, the price action on these 2 products makes perfect sense. We have also mentioned that parity, or a Dollar for Dollar, acts as a point of Resistance for any pair. Therefore a close below parity is psychologically important as it states the market is ready to support this price level. The opposite is also true as an inability to close above parity indicates the market is not ready to support the current price level. For those that trade Support and Resistance this is a seemingly optimal time to get in as the CAD is floating above $1. We have drawn trend line Support and Resistance, expect that if the CAD can not close below parity that it may bounce between trend line Resistance and $1 until the market moves forward.
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