Trading plan for 22/05/2017

Trading plan for 22/05/2017:

Markets are beginning the new week in a positive mood, and the Asian stock exchanges are at the highest levels in a month. The political turmoil in Washington is still weighting on the US Dollar. Crude oil remains strong, gold opened with a gap up is coming back to the range.

On Monday 22nd of May, the economic calendar is light, later in the week market participants will pay attention to the Bank of Canada's interest rate decision, FOMC meeting minutes, New Zealand's annual budget data and the national CPI data from Japan.

Market snapshot: EUR/USD trading at the highs

The Friday high was at the level of 1.1212, but it was made as a part of a negative divergence between the price and the momentum indicator in overbought market conditions. Currently, the pair is trying to test the technical support at the level of 1.1169. If this support is breached, then the next one will be seen at the level of 1.1075. On the other hand, the price is very close to the next technical resistance at 1.1298 from November last year, so the selling pressure might increase.

Market snapshot: GBP/USD just below 1.3000 level

The GBP/USD pair is still trading at elevated levels, just below the 1.3000 resistance. Last week, this pair managed to make a new high at the level of 1.3047, but the clear negative divergence and overbought trading conditions are indicating a possible corrective pullback towards first the level of 1.2881 and then possibly towards the level of 1.2828. The technical support zone between the levels of 1.2706 - 1.2772 still remains the most important support for the bulls.

Market snapshot: crude oil broke above the 61%Fibo

The crude oil prices have made a new high at the level of $50.88, which is above the 61%Fibo at the level of $49.93. Nevertheless, the market conditions look overbought now and there is a bearish divergence visible between the price and the momentum indicator. Corrective pullback towards the level of $50.23 or even $49.94 is expected soon.

Market snapshot: Gold opens with $3 gap, but gets back to the range

Gold had opened with a weekend $3 gap up, but quickly got back to the range zone after being capped by the navy trend line resistance. The key zone for the bulls between the levels of $1,259 - $1,271 was tested but hasn't been clearly violated yet. The sellers pushed the price lower at the level of 61% at $1,264, but buyers still try to break through. The momentum indicator remains above fifty level so there is still a chance for another leg up before any bigger correction will occur.