Technical Analysis - Euro-dollar and crude oil in focus

EURUSD

Post brexit EURUSD has been trending in a sideways formation with the upside being capped at 1.1160/80 zone, which interestingly is the 50% retracement of the Brexit move and in addition the 38.2% retracement of the entire move lower. For the time being short term support resides at 1.0912/50, the 1.0912 being the swing low of the Brexit move and the 1.0950 being Mondays swing low.

EUR_July29_1

EUR_July29_2

At present the broader trend is lower highlighted by the orange down trend channel. This may suggest that should prices continue to rise and breach the sideways formation it may be capped at 1.1220/65 level which coincide with down trend resistance along with Fibonacci retracement levels, however a test of 1.1165 would need to be achieved first. Should this recent upside momentum dissipate it could be plausible to see a test of the previous lows  of 1.0950/12. In addition we can see that the day of the brexit vote saw a clear breach of the rising trend line from December 2015 lows, which may still hold weight to a bearish sentiment towards the Euro.

NYMEX

Oil is currently testing the 200 SMA after having a considerable pullback from the highs of 51.66. As we can clearly see, oil has breached its upward trend form February’s lows and has pulled back to breach some important Fibonacci retracement levels. Price initially consolidated in and around the 23.61% level at 45.64 before continuing its ascent to test the 38.2% retracement at 41.92, price did not hold this level for long , as we saw US crude inventories rise, whilst the market was expecting a fall.

Nymex_crude_July29

Today, thus far, bearish sentiment has continued to see prices fall as low as 40.58 whilst the 200 SMA is at 40.67, this could be a potential signal to the market that there could be a possibility of a trend continuation or should this act as major support a potential shift in sentiment. Moreover as we have approached the 2OO day moving average the RSI has just tested the 30 line potentially suggesting the market could be oversold. 

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