Daily Insights Report 18/07/2017

• 18 Jul 2017

USD/JPY

The USD/JPY pair has retraced from a significant bullish run during the month of June. However, momentum has turned bearish resulting in a break of the 113.76 resistance area and the 20-period exponential moving average (EMA). MACD and RSI confirm the downward bias with both indicators turning more negative, however, MACD remains in positive territory.  There are signs however, that the move is not necessarily driven by conviction of sellers, as declining volume suggests that previous buyers may be closing out positions after the bullish run. Price action is approaching a previous resistance area at 111.81 and if the pair can break through this area, the downtrend gains more significance.

GBP/USD

The GBP/USD pair has broken a resistance level at 1.303 with a significant bullish move in a week where Bank of England Governor Carney, admitted the time to raise interest rates may be sooner than previously thought. Despite the impending uncertainty surrounding Brexit, the pound has reached new recent highs, however the move on the 14th of July to break the resistance line was met immediately with selling pressure. Price action appeared to be heading back to the 1.303 resistance line but bounced back to take prices higher. Clearly this resistance area is gaining significance and could provide support for the pair going forward, and equally, a break of this line may signal the end of the bullish run.

Impact event: U.K CPI data at 11:30 GMT+3 and Governor Carney speech at 16:30 will likely impact all sterling pairs.

USD/CHF

Unsurprisingly, with Gold prices rallying, the USD/CHF pair has been suffering in recent trading sessions. A break of the 20-period EMA, which has been acting as a support area, signaled the start of the move which has resulted in another break, this time, of the 0.961 resistance line.  MACD remains in negative territory moving further from the zero line and RSI is near oversold territory, however there is still room for further downside. Declining volume suggests less interest from the market with the pair trading mainly in range with a downside bias. The next target for price action is the 0.955 price level.

SILVER

Following the Gold rally, Silver prices have risen after a session low of 14.38 on 7th July 2017. Price action is now testing a support line at 16.20 and the 20-period EMA. Clearly a break of these two levels would provide support for the uptrend with the next price targets at 16.43 and 16.82. RSI has bounced off the oversold area and has sharp upward trajectory. MACD remains negative however has flattened. Volume appears to be moderate indicating some appetite from buyers of the metal.