Daily Insights Report 31/07/2017

• 31 Jul 2017

USD/CHF

The USD/CHF pair has broken the 20 period exponential moving average (EMA) and continued in a bullish direction.  MACD also appears to be turning less negative yet remains in bearish territory. RSI has flattened just below the 70 overbought area suggesting there is still room for upside momentum. Volume has been rising into the bullish move indicating strong appetite from buyers.

GOLD

Gold has broken a resistance area at the 1257 price level and has continued on to meet and test the 1268 price level. MACD has also broken the zero line within the last four bars. However, RSI has reached and price action has rejected, the 70 overbought area, suggesting the uptrend could be losing steam. Volume remains moderate and a clear break of (a candle closing above) the 1268 price level will signal strong conviction from buyers.

USD/JPY

The USD/JPY pair has broken the exponential moving average and a resistance line at the 111.79 price level.  Price action has pierced a previous support area which formed after a previous break of the 20 period EMA. The support area at the 110.39 price level will provide significance to the downtrend, if price action is able to break and move lower. MACD confirms the bearish sentiment with a move below the zero line, though RSI is sharply approaching oversold conditions. Volume, however, appears to be climbing into the move.

EUR/USD

The Euro has enjoyed a surge against the dollar partly due to weakness of the greenback. The EUR/USD pair has continued to bounce along the upper Bollinger band and has hit the 70 overbought area on RSI. However, given the fact that the euro is looking overbought is there a chance of a reversal?  Divergent monetary policies will likely put pressure on the euro as the Federal Reserve aims to reduce its balance sheet whilst implementing interest rate hikes.

Impact event: Eurozone Flash Estimate CPI data will be released at 12:00 GMT+3 and will likely affect all euro pairs.