EURUSD vulnerable to more downside at the start of next week

EURUSD remains in a medium-term bullish trend after bottoming at 1.11 and started making higher highs and higher lows. The break above 1.1350 was an important bullish sign and this back test is of similar importance.


Green line - support trend line

Red rectangle - support area

EURUSD has tested this past week the 1.1350 level several times. Breaking below it will open the way for a move towards 1.13-1.1270. Bulls do not want to see price break below the green trend line otherwise our medium-term trend reversal signal will be canceled. So far price action is bullish because the RSI is getting relieved from overbought levels while price mainly moves sideways. Price remains above the previous high as this is now support. Resistance is at 1.14 10 and if broken I expect price to continue higher towards our longer-term target of the wedge break out at 1.17.

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Gold remains vulnerable to a move lower towards $1,380-70

Gold bulls tried to recapture the short-term resistance area of $1,415-25 but where not strong enough. Gold price remains close to the $1,400 resistance and I believe that next week it is more probable to break it and move towards $1,380.


Blue line - bearish divergence

Green line - trend line support

Red rectangle -support area

Blue rectangle - target if support breaks

Gold price should move towards the green trend line support and the blue rectangle if price breaks below $1,400. So far the medium-term trend remains bullish but in the short-term we see some warning signs by the RSI. The bearish divergence that we warned last week so far has brought weakness in price and a short-term reversal. This reversal is most probably not finished and the pull back could reach the green trend line support. Key short-term support at $1,400. Resistance at $1,415-25.

The material has been provided by InstaForex Company -