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Technical Trade Setups: Gold, Canadian Dollar and S&P 500 Levels

Technical Trade Setups: Gold, Canadian Dollar and S&P 500 Levels

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Near-term Technical Outlook: Trade Setups on Gold, USD/CAD & SPX500

  • Updated charts on technicals setups we’ve been tracking in Gold, USD/CAD & SPX500
  • Gold breakout looks to threaten 2020 slope resistance
  • USD/CAD monthly range set above support
  • S&P 500 attempting breakout ahead of US CPI

An update on technical setups we've been tracking inthe Gold, the Canadian Dollar and the S&P 500. These are the targets and invalidation levels that matter heading into key US inflation data tomorrow. Review my latest Strategy Webinar for an in-depth breakdown of thesetechnical setups and more.

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Gold Price Chart - XAU/USD 240min

Gold Price Chart - XAU/USD 240min - GLD Trade Outlook - GC Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; Gold on Tradingview

In yesterday’s Gold Price Outlook we highlighted that a, “recovery off uptrend support takes the immediate Gold rally back into uptrend resistance and we’re looking for possible price inflection up here.” Price is attempting to breach above this key pivot zone today at 1829 with US CPI on tap tomorrow- watch the weekly close. Weekly open support at 1807 with the broader outlook still constructive wile above 1791.

Bottom line: Pullbacks should be limited to the median line IF gold is heading higher on this stretch with a topside breach / close above 1849 ultimately needed to mark resumption of the broader uptrend. Review my latest Gold Weekly Price Outlook for a closer look at the longer-term XAU/USD technical trade levels.

Canadian Dollar Price Chart - USD/CAD 240min

Canadian Dollar Price Chart - USD/CAD 240min - Loonie Trade Outlook - USDCAD Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; USD/CAD on Tradingview

In my latest Canadian Dollar Technical Price Outlook we noted to that the, “USD/CAD pullback is testing near-term uptrend support here – for now, we’re on the lookout for a possible exhaustion low.” Price rebounded more than 1% into the close last week only to give it all back into the open. The focus shifts to a breakout of this near-term consolidation range just above support at the yearly open / 38.2% retracement at 1.2640/65. Resistance steady at 1.2767 – a topside breach / daily close above is needed to mark resumption towards the yearly high at 1.2813 and the 78.6% retracement at 1.2854.

Bottom line: USD/CAD is coiling just above support – look to the breakout for guidance. A break below the monthly opening-range would shift the focus towards Fibonacci support at 1.2582 and lower parallel (currently near ~1.25). Review my latest Canadian Dollar Weekly Price Outlook for a look at the longer-term Loonie technical trade levels.

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S&P 500 Price Chart – SPX500 240min

S&P 500 Price Chart - SPX500 240min - US500 Trade Outlook - SPX Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; SPX500 on Tradingview

We’ve been tacking this setup in the SPX500 since the start of the year and the focus is now on this attempted breach above the upper parallel today in US trade. Ultimately, a breach / close above the 61.8% retracement at 4592 is needed to validate the breakout towards 4673/92- look for a larger reaction there IF reached. On the other side, IF this breakout falters into CPI tomorrow, keep an eye on initial support at 4451 backed by the January trendline near ~4400. A break / close below 4363 would be needed to mark resumption with such a scenario threatening a plunge towards the May high at 4245 and 4197.

Bottom line: We’re looking to validate this breakout into the close of the week with major US event risk on tap tomorrow. From at trading standpoint, losses should be limited to the monthly open at 4500 IF price is heading higher on this stretch – be on the lookout for an exhaustion low with a breach above 4692 needed to put the bulls back in control.

SPX500 Trader Sentiment – US500 Price Chart

SPX 500 Trader Sentiment - US500 Price Chart - SPX Retail Positioning - SPX500 Technical Outlook
  • A summary of IG Client Sentiment shows traders are net-long the S&P 500- the ratio stands at +1.22 (61.10% of traders are long) – typically weak bearishreading
  • Long positions are4.97% lower than yesterday and 4.30% higher from last week
  • Short positions are 8.93% higher than yesterday and 8.53% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests US 500 prices may continue to fall. Traders are less net-long than yesterday but more net-long from last week. The combination of current positioning and recent changes gives us a further mixed SPX500 trading bias from a sentiment standpoint.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

-Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michaelon Twitter @MBForex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.