Weekly EURUSD analysis

EURUSD challenged the 1.12 level once again, but bulls were not strong enough for a second time to hold above 1.12. Price is back below the horizontal resistance (red rectangle) at 1.1170. Price so far has respected short-term higher highs and higher lows. In order for bulls to remain in control of the trend, we should see price starting to rise after Monday.

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Red rectangle - resistance

Blue rectangle - support

Green lines- bullish channel

EURUSD has made another negative weekly performance and it is testing the weekly bullish green channel. Price has not managed once again to close above the red rectangle resistance. As long as price is below it bulls need to be very cautious. This past week's low is important short-term support. Bulls need to recapture 1.1170-1.12 in order to have hopes for a move towards 1.13.

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Weekly candlestick pattern in Gold implies the start of a correction

The last time we had a weekly RSI bearish divergence in Gold price, we saw prices pull back around $200. Gold price has formed a bearish reversal candlestick and combined with the RSI divergence makes us believe that we should expect more downside.

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Green line- bearish divergence

Both the RSI and the stochastic are providing weekly bearish divergence warnings. The weekly candlestick with the long upper tails confirms this warning. Also in Elliott wave terms, Gold price we can say that it has made 5 waves up from the August of 2018 low. So it it is time for a pull back. Back in December of 2017 where we had a similar weekly bearish divergence, Gold price pulled back $200. We continue to expect such a pull to be very possible. First short-term target is the $1,500 area.

The material has been provided by InstaForex Company - www.instaforex.com