Daily Insights Report 11/08/2017

• 11 Aug 2017

USD/JPY

The USD/JPY pair has broken two support levels at 109.91 and 109.25 respectively, however, the 109.25 price level is significant as it represents a strong support line. Price action is heading towards its lowest level since the end of May/ beginning of June. The question is whether this sharp fall in price will be sustained. Volume has been rising into the bearish move and MACD remains below the zero line. However, RSI has reached the 30 support line indicating there is a chance of a bullish reversal in the near term. A bounce of the 30 line on RSI with a candle closing above 30 would indicate a reversal.

Impact event: U.S. CPI data will be released at 15:30 GMT+3, impacting all dollar pairs.

GOLD

The Gold touched and bounced off the 20-period exponential moving average and the 1255 price level which have both acted as support for the asset. Strong bullish momentum has taken the metal towards the 1292 resistance line. However, the current session doji candle and the fact that RSI has reached the 70 overbought zone suggests that the trend may not be sustained.  MACD remains in positive territory and volume has been rising into the move. A reversal will be indicated if RSI bounces off the 70 line and a bearish candle closes below the 70 line.

USD/CAD

The USD/CAD chart shows that the pair has broken above the 20-period exponential moving average, however a stronger bullish signal will come from a break of the zero line on MACD.  Volume is high indicating there is a lot of interest in the pair even though currently, U.S. dollar buyers are failing to dominate. RSI has flattened just above the 50 line which some traders use as a sell signal. Stronger bullish momentum and a positive break on MACD are required to signal an uptrend.

NZD/USD

The NZD/USD pair has hit the lower Bollinger band and price action is moving towards the 0.721 support line, which represents a fairly strong support area. RSI has bounced in a more bullish direction and MACD remains in positive territory despite having a sharp downward trajectory.  Therefore if price action reaches the support level at the 0.721 price level there is a strong chance of a bullish reversal, to continue the previous uptrend.