Last week Oil has continued a correction which can unexpectedly end with, for example, negative data from China. The fundamental picture at the commodities market is still unchanged – the demand is lower than the supply. However, oil’s correction can continue next week, which would impact other commodity assets, such as gold.
In general, everything stays as it was. Except for the Bank of Japan, which has introduced negative interest rates. This decision was quite unexpected. By the way, a year ago Swiss National Bank has done a similar thing and cancelled the limit of 1.2000 for EUR/CHF. This decision was quite as unexpected for the markets. Now it is quite hard to believe central banks – they make one promises and then do just the opposite.
The pair has broken the downstream channel, which lies on three points. In this light, we are getting ready to buy the pair:
Gold has formed a hammer, which ran into the local level. Last week we have bought gold and will continue holding the purchase up to the broken upstream channel. We will start selling the precious metal right by the above mentioned channel:
There is a falling star formed by the broken level and channel for the Australian currency. Therefore, we will try to sell the pair when the market opens. We are reducing the lots as a Stop Loss on a daily chart will be around 75 points: