Fibonacci Scale Counts
The U.S. dollar gained value yesterday where the major pairs including the euro and the pound dropped sharply where both of them entered the bearish channel, but it is being considered as a healthy bearish correction of the solid bullish improvement they gave last month.
The euro fell below the critical support level of 1.3750 yesterday after which sellers entered heavily in the market where they took the pair down to the 1.3630 level. The pair is currently trading at 1.3636 during the start of the U.S. session on Friday, where sellers would remain in control as long as it trades below its pivot point level of 1.3680. Overall, the short-term to medium term outlook is bearish as long as the pair remains below the 1.3770 resistance level.
The British pound also slumped notably where it has lost more than 160 points within 2 days as the GBP/USD is trading at 1.6423 where strong resistance is at the 1.6458 and 1.6477 levels, where it must breach both these levels and sustain above them in order to regain its bullish momentum.
However, on the other hand the construction sector in the U.K. economy did not grow as expected in the past month; hence the investors are kind of bearish on the pair. But this downward move is surely a bearish correction, where actual movement would be seen after the release of manufacturing and services sector data that would be released next week.
Now this is interesting; gold opened up this year with a bullish gap that it has not yet filled, and is currently trading at the 1229 level where bulls are looking forward to take the metal to 1245 the region, breaking of which could show 1262 and 1268 resistance levels that are clustered with each other.
The FOMC member’s speech is due tonight where an overall outlook of the monetary policy might be discussed as the new chairman would be joining the seat in the Federal Reserve this year.
To contact the reporter of this story: Jonathan Millet at firstname.lastname@example.org