GBP/USD
The GBP/USD has rallied significantly during the course of the week, with most of the gains coming on Friday after the Non-Farm Payroll numbers came out at 209,000 jobs added last month, well under the 225,000 expected. Furthermore, the previous month had been revised down, so it makes a certain amount of sense that people are selling off the US dollar as the inflation situation in the United Kingdom continues to strengthen.
In a break above the weekly range, we could see the British pound look into the 1.30 level. Otherwise, we could pull back toward the 1.2650 level, an area that has been supported previously, and therefore could set up either a move higher, or some type of consolidation for the week.
EUR/USD
The EUR/USD initially pulled back just a bit during the course of the week but remains very much in a range, but obviously had a very bullish Friday session, right along with the British pound. We ended up forming a bit of a hammer, and it suggests that the 200-Week EMA above is probably worth paying attention to, just below the 1.11 level, and if we can clear that, it’s very likely that the euro continues to take off to the upside. On the other hand, if we break down below the 50-EMA, ostensibly the bottom of the candlestick, then we could drop down toward the 1.07 level.
Silver
Silver has had a slightly positive week, and it looks like we are ready to test the 50-Week EMA above. If we can take that out, then I think silver goes looking to the $24.25 level. On the other hand, if we turn around and break down below the $22 level, then we could see silver really drop significantly from there. All things being equal, I think we continue to see a lot of sideways action with more of an upward tilt at the moment. Furthermore, you should pay attention to the US dollar, as there is such a negative correlation between the two markets.
Gold
Gold markets have initially fallen a bit during the course of the trading week, reaching down toward $1900 level before turning around. All things being equal, the market ended up forming a bit of a hammer, and therefore if we break above the 50-Week EMA, then it’s possible the gold could go looking to the $1950 level. The market could go looking to the $2000 level, which of course is a large, round, psychologically significant figure, and an area where I would expect to see a lot of noise. As things stand right now, it looks as if the market is turning around to show signs of support.
USD/JPY
The USD/JPY initially tried to rally during the course of the week, but then broke down through the ¥142.50 level, which is an area that’s been important previously. Now that we are below there, it’s likely that we could continue to drift a bit lower, as traders are trying to suss out the idea of whether or not the Federal Reserve is going to change its attitude. It is nowhere near doing that, and eventually, a short-term pullback would be a buying opportunity, and some type of bounce offers the possibility of a move higher.
USD/CAD
The USD/CAD initially tried to rally during the course of the week, but pulled back from the 38.2% Fibonacci level, and then broke down below the 1.33 level. All things being equal, if the market were to continue to go lower, the 200-Week EMA underneath that offer support. If we were to break down below there, then it’s possible that the market could drop down to the 1.30 level, possibly the 1.28 level. On the other hand, if we were to break above the 50-Week EMA, then it’s possible that we could go looking to the 1.36 level.
GBP/JPY
The GBP/JPY initially tried to rally during the course of the week but then turned around to show signs of selling pressure. The ¥184 level is an area where we’ve seen a lot of resistance, therefore I think if we could break down below there. The ¥180 level is an area we could go looking toward the buyers to come back into this market. We are a little overdone, but at the end of the day, the Bank of Japan continues to keep loose monetary policy in place.
EUR/GBP
The EUR/GBP initially fell a bit during the week but seems as if we are trying to find some support near the 0.85 level. If we were to break down below there, then it’s possible that the market could go looking down to the 0.83 level, an area that has been important more than once. On the other hand, if we turn around and take out the 0.87 level, then the euro could really start to take off, perhaps reaching the 0.89 level.
