News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/5uSWKoLkd6 https://t.co/q80wSAoxXP
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here: https://t.co/aVAzFypAg1 https://t.co/7mc19Gxrvm
  • #Gold prices succumbed to selling pressure as the US Dollar soared this past week What is #XAUUSD facing these next few days and can these fundamental forces extend its selloff? Check out my outlook here - https://www.dailyfx.com/forex/fundamental/forecast/weekly/chf/2020/09/26/Gold-Price-Outlook-Rising-US-Dollar-Sinks-XAUUSD-Will-Losses-Extend.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/gPhy0KoW3W
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/38gTDnpPbn https://t.co/Xtk5g4JQEB
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/3Wked6GBOp https://t.co/SsUguHB39W
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:https://t.co/1oygcFMFNs https://t.co/aD1ZWhTWZp
  • The price of #oil may continue to trade in a narrow range as the rebound from the September low ($36.13) appears to have stalled ahead of the month high ($43.43). Get your #commodities update from @DavidJSong here: https://t.co/719LgjFmYG https://t.co/SSoqjONUzA
  • The Australian Dollar may extend its slide lower despite the planned easing of Covid-19 restrictions, as the market continues to price in an RBA rate cut on October 6. Get your #currencies update from @DanielGMoss here: https://t.co/HJpngnerzY https://t.co/g6X8ABQDwY
  • The Indian Rupee may be at risk to the US Dollar as USD/INR attempts to refocus to the upside. This is as the Nifty 50, India’s benchmark stock index, could fall further. Get your USD/INR market update here:https://t.co/ed4QR7QQOn https://t.co/gDWYNtm2UY
  • Technical indicators are chart analysis tools that can help traders better understand and act on price movement. Learn more about the importance of technical analysis here: https://t.co/NpC1D8y4Aa https://t.co/Q7TcbrYXjl
Cable, Crude and Gold: Price Action Setups

Cable, Crude and Gold: Price Action Setups

2017-04-20 13:15:00
James Stanley, Strategist
Share:

Talking Points:

- A slow news environment has offered a respite in many financial trends. Today, we look at three of the more interesting setups from a price action perspective.

- The big event from this week was the surprise announcement of early elections in the U.K. We look at price action in GBP around this announcement, while also delving into longer-term themes in Oil and Gold prices.

- If you’re looking for trading ideas, check out our Trading Guides. And if you’re looking for ideas that are more short-term in nature, please check out our IG Client sentiment.

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Cable Rally Testing

One of the more noteworthy events thus far on the week was the surprise announcement from British PM, Theresa May, of early general elections. The move has largely been applauded by analysts as a cogent political move ahead of what’s expected to be a terse negotiation around Brexit; but for traders and investors the bigger question is whether Tuesday’s announcement is a legitimate ‘game-changer’ for the U.K. economy.

The British Pound burst-higher on Ms. May’s announcement, breaking above the range that’s denominated price action in the pair since the ‘flash crash’ in early-October. But as we warned as it was happening, the move was very new and traders would likely want to avoid chasing-higher until more confirmation was seen. Since then, we’ve seen prices pullback a bit to find support at that same level that had previously offered resistance – around 1.2775. In yesterday’s technical piece on GBP/USD, we looked at how traders could take a risk-focused approach towards continuation strategies in Cable.

On the chart below, we look at the updated price action in GBP/USD, with eyes on how one might be able to continue to plot top-side strategies up to the 1.3000-big figure. For those that do want to take on short-exposure in Cable, fading this recent move-higher – they’d likely want to wait for this higher-low around 1.2775 to give way before plotting the short-side of the move.

Cable, Crude and Gold: Price Action Setups

Chart prepared by James Stanley

18-Year Trend-Line in Oil Still Catching Inflections

Oil prices have been swinging wildly of recent, and much of this has been driven by prognostications around OPEC and a continuation of last year’s OPEC/Non-OPEC deal. The current deal is set to end in June, but as of this morning reports that Saudi Arabia announced that Gulf-based Oil producers have reached an agreement on extending the deal.

So, this is still very early stage; and this likely isn’t the last twist to the story that we’ll hear regardless of whether or not an extension is agreed-upon; but for traders there is a very interesting technical observation taking place at the moment, and that’s the continued price action taking place around the 18-year trend-line in WTI.

Cable, Crude and Gold: Price Action Setups

Chart prepared by James Stanley

This multi-year trend-line is relevant to near-term price action because this is what’s currently helping to show resistance. For those looking at short-size exposure in WTI, this can be helpful for stop placement attached to continuation strategies targeting $50 or lower.

Cable, Crude and Gold: Price Action Setups

Chart prepared by James Stanley

Gold Prices Digesting Recent Gains, Down-ward Sloping Trend-Line Looms Above

Another commodity market seeing considerable volatility of recent has been Gold. As geopolitical tensions heated up over the past couple of weeks, Gold prices put in even more extension of the ‘rate hike rally’ that started after the March Fed meeting. We looked at the technical setup in Gold on Tuesday just after prices had run into the down-ward sloping trend-line that can be found by connecting the July-high to the election-spike. As we advised, traders would likely want to wait before chasing the move-higher, and since then we’ve seen a bit of softness develop on intra-day charts. First, we look at the Daily chart to get the ‘bigger picture’ view of what’s been going on in the Gold market:

Cable, Crude and Gold: Price Action Setups

Chart prepared by James Stanley

By drawing a Fibonacci retracement on that major move examined above, taking the July 2016 high down to the December 2017 low; we can find a series of levels that could be usable on an intra-day basis. We’re currently testing the 38.2% retracement of that move around $1,279.29. Traders would likely want to treat this level with caution given the numerous tests that we’ve seen of recent without the ability for buyers to have pushed prices-higher. But a bit-lower, we have a very interesting price action swing around $1,261 and around the psychological level of $1,250, we have the 50% Fibonacci retracement of that most recent major move. Each of these could become usable for top-side continuation approaches.

Cable, Crude and Gold: Price Action Setups

Chart prepared by James Stanley

--- Written by James Stanley, Strategist for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

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

DISCLOSURES