Daily Insights Report 17/05/17

• 17 May 2017

EUR/USD

The EUR/USD has broken both the 20 day exponential moving average (EMA) and a previous resistance. Price action is heading towards a previous top at 1.1144 and if the pair breaks through this level a new top may be formed. However, RSI is in the overbought zone and MACD appears to have plateaued. It remains to be seen if there is enough enthusiasm from buyers to take the pair much higher.

Impact event: European CPI data will be released at 12:00 GMT+3. No change is expected year-on-year; however estimates suggest a slight drop from the previous month.

SILVER

The reversal of trend for Silver looks to be underway. The metal appears to be crossing a previous support level which led to a fairly significant uptrend.  Price action also appears to have crossed the 20-day EMA which confirms the bullish trend. MACD also appears to be moving to more positive territory. One warning though, is the drop in volume in recent trading sessions. Therefore the question is whether the upward momentum can be sustained.

GOLD

Gold has a very similar trajectory to Silver indicating risk-on sentiment from investors. The two metals appear to have recovered some correlation at 73%. Gold has broken the 20-day EMA and has pierced the previous support level at 1243. Additionally, RSI has an upward trajectory having bounced of the 30 support line and MACD indicates bullish momentum. Unlike Silver, volume appears to be steady into the trend.

USD/CHF

A significant sell-off of US dollars has led to the USD/CHF breaking a strong support line at 0.9855. Further, price action has broken the 20 day EMA as the pair experienced significant volatility in yesterday’s trading session. However, RSI indicates some stall in momentum at the 30 support zone and volume is steady. It remains to be seen whether the pair will be held at the current support level on will continue the downtrend further. If the bullish momentum in Gold continues, USD/CHF will likely continue to slide.