Daily Insights Report 24/05/17

• 24 May 2017

AUD/NZD

The AUD/NZD is showing signs of bearish momentum. Price action has broken the 20-day EMA as well as a support level at 1.070. The 50 Fibo level has also been broken and price action is testing the 1.064 support level. The pair is heading towards the Fibo 61.8 level at which point there may be a bullish reversal. MACD remains in negative territory and RSI is reaching the oversold 30 support zone.

EUR/USD

The EUR/USD pair is looking overbought. Price action has broken the upper Bollinger band for the last 5 consecutive candles with buying pressure rising in the last few trading sessions. RSI shows a double top over 70 further indicating overbought conditions. Price action appears to be heading towards the 1.114 line and if it breaks, it is confirmation of the bearish reversal.

Impact event: FOMC Meeting Minutes at 21:00 GMT+3. The Federal Reserve may give indications about when the next interest rate hike will take place.

GOLD

Gold prices continue to reflect fundamental factors. Prices have retreated ahead of the FOMC meeting later today, as the market anticipates a rate hike at the June meeting.  Favour will likely go to the U.S. Dollar ahead of June’s meeting and given Gold’s inverse relationship with the dollar, in the medium-term prices will likely fall.  Price action is heading towards the 20-day EMA and subsequently the 1243 support line. MACD remains in negative territory.

Impact event: FOMC Meeting Minutes at 21:00 GMT+3.

CAD/JPY

The CAD/JPY pair has broken a resistance line at 82.41 and appears to be almost breaking the 82.72 resistance line. Price action has also broken above the 20-day EMA. Momentum indicators suggest sentiment is positive for the pair with MACD breaking above the zero line and RSI has a positive trajectory.  Volume has however, been declining into the uptrend, as 5 consecutive bearish candles indicate that sellers are very much still in the market.

Impact event: Bank of Canada Rate Statement at 17:00 GMT+3. No change in policy is expected.