Rosentray's Daily Commentary

[rosentray]

FED raised rates for the second time in a decade in yesterday's FOMC meeting. FED Chair Janet Yellen announced that the interest rate goes up with 0.25 basis points. The equity market didn't like the news and fell, while the EUR/USD went below 1.05. First support zone is seen at 1.0450.

 

[rosentray]

Gold went from $1,165 to a low of $1,136, currently trading at its lowest point. The precious metal felt the bear pressure when the FED announced to raise rates with 0.25 basis points.

Silver is also on the losing side, down from 17.20 to 16.53.

 

[rosentray]

EUR/USD reached a multi year low yesterday going to 1.0366. The pair broke the support level at 1.04 and stayed for a while before the bullish camp took the chance to buy the dip. EUR/USD is now trading at 1.0444.

 

[rosentray]

Gold Sells Off as Dollar Surges
As we head into years end markets become more and more uncertain due to increased volatility and unexpected price changes. The interest rate yesterday acted as a catalyst to a new wave of dollar rally and that resulted in a sell off in the Gold market.
The precious metal went from $1,165 to $1,138 on the day of the raise and continued to depreciate the next day going as low as $1,122. Currently, Gold is slightly recovered and is trading around $1,133. This, however, might only be a reflex from the sharp sell off and price still has a good chance to continue South to a probable first target level at $1,100.
It wouldn't be surprising if bears try to reach that psychological $1,100 before the year ends as this looks a realistic goal for we have seen what Gold did in the second half of the year.
In January this year Gold was at a low at $1,046, then went up almost 40% to a high of $1,375. Now Gold has lost almost every gain made throughout the year leaving all Gold bugs devastated.
The economic outlook for the US economy is very optimistic and that might reflect on the price of Gold in the near future and Gold bulls might not like it.

 

[rosentray]

EUR/USD is trading somehow lower in the early opening hours of the week. The pair is now 1.0459 up from 1.0366. Main trend remains bearish as the pair broke the support level at 1.04. The break suggest that a move down is likely which hints to a probable parity in 2017.

 

[rosentray]

USD/CAD is trading lower in the first hours of the opening session today as market participants are cautious and careful in the week before Christmas. US dollar bulls are withdrawing a bit as the US currency is seen to decline against its competitors.

USD/CAD traded at 1.3418 last week and went slightly below 1.34, currently 1.3383. Main trend on the short-term remains bullish but on the long-term we can observe how narrow of a path the pair has chosen to go. Since May USD/CAD has been trading in the range between 1.27 and 1.34. Last week the USD made a low of 1.3080 against the CAD and that acted as a support, moreover the pair got assisted by the 200SMA.

What follows next might very well be a consolidation until years end as we have no major news or events that can inject new volatility. Traders and investors might take this time to get off the markets and spend time with their families in the warmest holiday of the year.

 

[rosentray]

AUD/NZD Consolidation Continues

It has been a rough year for both the Australian and the New Zealand dollar. The pair made a low in September at 1.0230 which acted as a support zone, confirming the prior support levels at 1.0022 and 1.0042. After that recent low the Australian dollar started to appreciate against its counterpart going as high as 1.0763.

That level, however, was met with disapproval from the bear camp and they used the resistance created by the 200SMA to bring the price down to lower levels. Since then, the pair has been in consolidation forming a coil with very volatile and uncertain moves to both sides.

Currently, the pair is trading at 1.04640 and, as it appears, it might try to revisit the support level this time slightly below 1.0300. If we see a dip below that line, bears can take control over it and bring it even further below 1.0100.

On the other hand, if we can break above the 200SMA then bulls will have the upper hand.

 

[rosentray]

EUR/USD is trading with little to no change in today's opening hours. The pair is now 1.0404, down from today's high of 1.0479. If we break below 1.04 again then bears might have the upper hand and we could see parity in the near future. First support is seen at last low at 1.0366.

 

[rosentray]

USD/CHF Double Top

In the week before Christmas despite all the prior volatility and uncertainty in markets there is still some good old pattern following movements. Markets are now calmer and contained as we head into 2017. USD/CHF made a high 1.0340 on 15 Dec and since then it's been trading around the 1.0300 level. That level is seen as a second top which comes less than a month after the first top made on 27 Nov.

USD/CHF is now trading at 1.0277 indicating that the resistance zone is acting strongly and preventing bulls from going above 1.0350. If that level holds we might see a move to the downside to a probable first target of 1.0000, or in other words - parity.

On the other hand, given how strong the US economy is right now and how optimistic the outlook is, bulls can very easily take out the resistance and go well above 1.0350.

No matter which one it might be, market participants usually are very quite in the last week of the year so low volatility can be expected.

 

[rosentray]

EUR/USD is now trading slightly above 1.0405, better than yesterday's levels below the psychological 1.04 level. The pair seems more confident to try and make move to the upside before the weekend. However, bears have the upper hand and if they manage to bring it back below 1.04 for the day this might act as a catalyst for future depreciation in the near-term.