The price of gold rallied +4.86% and printed the highest weekly close rate in seven years at $1694.90 per ounce. Although this week started with a negative gap, the yellow metal pared losses and kept growing on the back of sustainable demand for call options. The technical analysis points to a bullish sentiment and the uptrend should continue in the week ahead.
The weekly timeframe is still bullish, according to the chart setup below. The Ichimoku Cloud trend indicator has a continuation pattern as the leading span has a positive surplus and both curves are placed above the cloud. The only concern for the bulls, in the long run, is that Conversion and Baselines are very close to each other, pointing to a high likelihood of volatility and possible whipsaws. The Average Directional Index still has a positive bias as the +DI line (green) is above the -DI line (red). However, the ADX mainline bounced off the recent peak and headed back toward the threshold, which could indicate a weakening bullish momentum.
The daily timeframe below is less convincing though. The main concern is that the Ichimoku Baseline is still below the cloud, which adds uncertainty to the equation. The ADX indicator is positive but the main line is below the threshold, underlining a comparatively weak momentum. Therefore, the bulls should add more volume of buying call options to proceed with the uptrend.
Stochastic RSI is extremely overbought, adding chances to a deep bearish retracement. Support levels come at $1662 and $1631, so these prices might be considered attractive to start buying call options with 24-hours expiration if the Stochastic RSI oscillator remained above the middle line. Another scenario suggests that the bulls might ignore those technicals and keep buying call options amid the fundamental environment which is positive for the price of gold during the turmoil in the financial markets.
WTI Crude Oil: Bearish
The OPEC meeting and the decision to cut oil production by the largest volume in history (10 million barrels per day) did not help the oil market to recover. The price of WTI Crude Oil dropped more than 30% this past week, and the price action was in the same direction on Monday.
The daily chart setup confirms the previous suggestion that the upside spike was nothing but a technical retracement of the long-term downtrend. The price of oil failed to breach the middle line of the Williams Alligator, underlining that the call-option buyers lack the volume and momentum to push the price higher. Besides, the indicator remained in the bearish eating mode as all of its lines are placed in the right order for the black gold price to keep falling.
The MACD trend indicator is mixed as the histogram is still in the positive territory, reflecting the recent bullish bounce. However, both lines are still in the bearish zone and ready to perform a reversal bearish crossover. The Relative Strength Index is also below the middle threshold dividing bullish and bearish momentum.
There is a clear horizontal static support on the daily chart - $20.10, the lowest daily close on March 31. The bears have already gone a long path to retest the support, and the likelihood of a breakout is very likely. If so, the downtrend could accelerate toward long-term support levels seen in 2002: $18.67 and 16.90 in extension. Put options are preferable for the week ahead.
After charting a long-term peak, the USD/RUB currency pair retraced and charted 9 straight daily candlesticks in the red. The depth of the technical correction is rather robust as the pair dropped to 73.50 roubles per dollar. However, all of the bearish candlesticks have comparatively short bodies, which might point to binary options traders’ unwillingness to buy too many put options. So the main question for the technical analysis is to determine the threshold dividing the retracement from complete reversal.
The daily chart below shows the uptrend started in mid-January this year. The Ichimoku Retracement Levels tool connects the lowest daily open with the highest daily close rate. As a result, an extremely important support level appeared on the chart - 61.8% Fibo at 73.2798 roubles per dollar. As the chart shows, there are no daily close below it, so, formally speaking, USD/RUB is still in the uptrend.
Two exponential moving averages complete the technical outlook. On the one hand, the currency pair breached 34-days EMA on Friday and the price action headed further south on Monday. On the other hand, the exchange rate is still above 55-days EMA (both periods represent Fibonacci numbers), which is bullish. Therefore, if the bears were unable to break through 71.5800, then chances for the uptrend continuation would be higher. Otherwise, the reversal pattern might signal the end of the upside momentum and the rate could keep retracting toward the next support range of 70.0000/9374.
The Aussie was one of the fastest-growing currencies among majors this past week. The AUD/JPY cross-rate soared +5.85%, breaking through several key technical resistance levels. Although the long-term charts are still bearish, the upside momentum could continue lifting the rate and here is why.
Both weekly and daily leading spans of the Ichimoku Cloud trend indicator are still bearish. What the bulls achieved last week was the recovery of the rate toward the bottom of the cloud on the daily chart (see below). Another positive sign is that the Conversion line and Baseline performed a bullish crossover, which could lead to a deeper bullish retracement. However, if the call-option buyers failed to enter the cloud, a rebound toward the Conversion line at 66.718 would be on the table.
Although Awesome Oscillator changed the sentiment, a series of continuous green bars is required to proceed with the uptrend. Williams %R oscillator peaked in the overbought territory and headed toward the threshold, which is also bearish. If the indicator went off the oversold zone, then a deeper bearish slide might follow. Otherwise, the bulls could regain the momentum and try to retest the resistance mentioned above.
The tech-heavy stock index charted an impressive rally of almost +10% this past week. The short-term technical analysis shows that the stock index has not reached a local peak yet and further upside action is possible on the back of robust demand for call options.
The daily chart below shows three bullish signals. First of all, the index breached the 13-days simple moving average from below and remained above it during the period of high volatility. Second, Parabolic SAR is bullish as its dots jumped below the price. Both indicators are rising simultaneously. Third, the Average Directional Index with a period of 14 days performed the bullish crossover for the first time since the market crash started on February 21. The ADX mainline erased all of the bearish momenta, underlining that the volatility eased on the market. If the bulls were able to continue the sequence of higher highs on the daily timeframe, then buying call options might be lucrative.