Market Insights 17 August 2020

Market Overview 

Gold fails to keep bounces off $1,929, extends Friday’s losses. The yellow metal remains on the 

back foot for the second consecutive day while ignoring the mixed catalysts. The reason could 

be traced from the US dollar’s pause after a three-day losing streak. 

EUR/USD rally looks overdone as per technical indicators, however, a notable pullback could 

remain elusive, as a fiscal impasse in Washington is likely to keep the dollar bulls at bay. Record 

bullish bets also make EUR vulnerable to a pullback. 

EUR/USD

The pair is trading at 1.1860 at press time, representing a 0.17% gain on the day. The weekly 

chart relative strength index is hovering above 70, indicating overbought conditions for the first 

time in over 2.5 years. That, coupled with the all-time high bullish bets, makes the shared 

currency vulnerable to a setback. 

The support is near 1.0805, while the resistance is around 1.1895. 

GBP/USD

The GBP/USD pair rises for the third day despite a recent pullback from above 1.3100 this 

morning. The Cable cheers the US dollar’s declines ahead of the key Brexit talks. The US NY 

Empire State Manufacturing Index and risk catalysts can offer intermediate move. 

Although 10-day EMA restricts the pair’s immediate downside around 1.3055, bulls will keep 

struggling unless crossing 1.3200. The pair is perfectly moving in an uptrend channel now. 

USD/JPY

The daily chart for the USD/JPY pair shows that its weekly rally stalled a few pips below a 

directionless 100 DMA, but it has spent most of it above a bearish 20 DMA. The Momentum 

indicator in the mentioned time-frame advanced within positive levels, maintaining its bullish 

slope, while the RSI is also above its midline, but has already turned south. 

In the 4-hour chart, the pair broke below its 20 and 200 SMA, while technical indicators crossed 

their midlines into negative levels before turning flat. The risk of a bearish extension will likely 

increase on a break below 106.65, the 23.6% retracement of the latest daily advance. The support 

is near 106.20. 

AUD/USD

AUD/USD is better bid at press time and could soon test the psychological hurdle of 0.72, as the 

daily chart is showing a bullish cross of the 100- and 200-day SMA. In addition, the daily chart 

relative strength index is hovering in the bullish territory above 50 and the 4-hour chart shows 

an inverse head-and-shoulders breakout. 

A move above 0.72 would expose the recent high of 0.7243 reached on August 7th. On the 

downside, the higher low of 0.7109 created on August 12th is the level to defend for the bulls. A 

violation there would open the doors for a sell-off to the 50-day SMA, currently at 0.7010. 

XAUUSD

Although multiple resistances around $1,980 questions the metal’s short-term upside, sellers will 

have to wait for a daily closing under a 50-day EMA level of $1,868 before taking entries. Gold is 

moving around Fibo 38.2% level at $1,944. 

The immediate support is near $1,930. The resistance awaits at $1,980.

XTIUSD

WTI stays struggles to extend the run-up past-200-bar SMA inside the triangle. The black gold 

funnels down a short-term ascending triangle while staying above 100-bar SMA. Sellers may aim 

for $40.80 on the confirmed downside. If WTI breaks through $43.42, the further sky limit would 

be roughly 500 pips up.