Never miss a story from Michael Boutros

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Michael Boutros

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Talking Points

  • USDOLLAR Channel breakout in question
  • Gold in consolidation below key near-term resistance
  • Updated levels and invalidation points

USDOLLAR Daily Chart

USDOLLAR, Gold Setups Target Key Resistance- Breakouts Pending

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • USDOLLAR testing key resistance range 10,488/95- bearish invalidation
  • Topside breach targets objectives at 10,517/24, 10,562/71, 10,618
  • Interim support 10,444 (May Open / May 2nd Close)
  • Break targets 10,401, 10,365/79- bullish invalidation
  • Daily RSI resistance trigger-break- bullish

Notes: The USDOLLAR looks vulnerable near-term below key resistance at 10,488/95 but we are working under the assumption that a significant low may have been put in this month. We highlighted this region back on March 20th, when the index mounted an impressive 2-day rally into fresh monthly highs off this mark. This range is defined by multiple key Fibonacci ratios as well as the 50-day moving average and the May opening range high and we will use this threshold to validate the break of channel resistance dating back to the 2014 high. Longs into/below this level are at risk in the near-term with a breach/close above offering further conviction on our directional bias.

Bottom line: the greenback looks constructive and with cyclical trends further supporting our broader outlook for a strong May performance. Look for a low into the end of the week/early next week to buy into with breach of the May opening range targeting a late month high into subsequent resistance objectives.

Gold Daily Chart

USDOLLAR, Gold Setups Target Key Resistance- Breakouts Pending

Technical Outlook

  • Gold consolidation break-out pending below major resistance confluence
  • key resistance $1307/10- near-term bearish invalidation
  • Breach shifts focus back to $1327/34, $1348/50 & $1366
  • Interim support $1291 (200DMA), TL support & $1260/70- bullish invalidation
  • Break below opens up targets at $1216/24 & $1178/80
  • Daily RSI break-out trigger pending

Notes: Similar to the USDOLLAR trade, gold seems poised for an assertive move heading into the close of May trade as the precious metal continues to bottleneck into the apex of a multi-month consolidation pattern. Our strict focus is against key resistance at $1307/10- a region defined by the 61.8% retracement of the April decline, the 100% extension off the April low, triangle/trendline resistance dating back to the 2012 high, and the 50-day moving average. Interim support has been provided by the 100-day moving average over the past few sessions and a break below this looks to challenge trendline support dating back to the April low. The $1260/70 key support rang remains pivotal with a weekly close below needed to validate the resumption of the broader downtrend.

Note that the biggest risk to the technical outlook here is a more pronounced sell-off in risk assets. Should the equity declines intensify, look for the downside to remain limited with a break above $1310 shifting our medium-term focus back to the resistance-zone noted last month at $1327/34. Bottom line: stay nimble between trendline support and $1310 with a likely breakout over the near-term likely to further validate our directional bias. Follow the progress of these trade setups and more throughout the week with DailyFX on Demand.

Other Setups in Play:

---Written by Michael Boutros, Currency Strategist with DailyFX

For updates on this scalp and more setups follow him on Twitter @MBForex

To contact Michael email or Click Here to be added to his email distribution list

Join Michael for Live Scalping Webinars Monday on DailyFX and Tuesday – Thursday next week on DailyFX Plus (Exclusive of Live Clients) at 15:30 GMT (11:30ET)

Interested in learning about Fibonacci? Watch this Video