EURUSD
The euro initiated a recovery cycle after printing a fresh multi-year low at 1.2145 but it still trades far below last month’s region. Sentiment remains highly bearish on both short-term and medium-term studies and the 525 points recovery from 1.2145 to 1.2670 is less than half of current month’s 1200 points range. Even though current recovery may continue, aiming the $1.300 level, bulls are walking on thin ice as the downtrend may easily resume and no solid support levels are seen below 1.2130/45 until 1.1200/10. Looking at the longer-term chart, we notice that recent low at 1.2145 is only a few points away from the 50% retracement of full bull market’s move from .8225 to 1.6037. Therefore, the question now is whether the entire decline from December’s 1.5100 to 1.2145 was corrective or not. One thing is certain – the euro will face tough challenges on its way to the upside, not having good chances to reconquer those levels which provided stable support 1,2 or 3 months ago. Important support levels for the coming week are 1.2430/50 and 1.2340 and while they remain intact, current bounce may reach 1.3050-1.31 but the subsequent sell-off may bring 1.2130/45 back in focus. Meanwhile, significant SNB (perhaps ECB, too) interventions may continue to prop up the Euro.
- EURUSD long-term chart 05-23-2010
- EURUSD medium term 5-23-2010
- EURUSD short-term 5-23-2010
- EURO COT 5-23-2010
GBPUSD
Former support at 1.4500 provided resistance last week but remains under heavy pressure and Friday’s upward action may resume, opening the North territory for further gains towards 1.4800 which is the next objective above 1.4500. However, short-term sentiment is highly bearish and a break above 1.4500, out of the 1.4250-1.4500 consolidation range, will be treated as a correction, triggering more short positions – amplifying the ongoing pound’s deterioration against the dollar.
- GBPUSD short-term 5-23-2010
Gold
Gold is currently in a corrective cycle which is normal, considering the fast rally from last month’s 1125 towards 1250. Short-term sentiment is currently bearish but Gold managed to hold gains above this month’s open at 1176. A sustained break above 1200-1210 should signal that the uptrend resumed, aiming back into the 1250 region and beyond. Keep an eye on the 1160 though, as it may be tested within the coming days. I expect the overall bullish structure to remain intact, printing higher lows – above April’s bottom at 1123.
- Gold daily chart 5-23-2010
Have a great Sunday evening!
