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.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Bullish
USD/JPY
Mixed
Gold
Bullish
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • The $JPY market faces a clear disconnect between domestic economic data and monetary policy. What if that were to change? Get your market update from @DavidCottleFX here:https://t.co/4Gr8tLaHvj https://t.co/0eXMv5CTnd
  • #Forex Forecast via @DailyFX: US Dollar Technical Outlook on $DXY, $AUDUSD, $USDCAD, $USDJPY & $EURUSD Full Analysis ⬇️ https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2019/11/17/usd-price-us-dollar-chart-forecast-dxy-audusd-usdcad-usdjpy-eurusd.html
  • Further escalation in Hong Kong will likely bode poorly for risk appetite https://t.co/0NjUd3ahBu
  • How should you trade around event risks and what steps can you take to improve your trading psychology? Find out from @JoelKruger, a trading consultant and mentor. Only on Global Markets Decoded. Missed the episode? Read up here:https://t.co/JWIGJk4vKa https://t.co/WB39x4GP99
  • Poll - Does your personality match your #tradingstyle? Vote and find out from @WVenketas here: https://t.co/vREsUIWSJd https://t.co/Ft0ExAmMpq
  • #Dow Jones hits record high, however, central bank liquidity prompts volatility implosion. #FTSE 100 among underperformers with focus remaining on politics. Get your #equities market update from @JMcQueenFX here: https://t.co/EOFleGSeBp https://t.co/ecAyfSUeAM
  • RT @C_Barraud: 🇪🇺 #ECB’s Muller Says More Assets Could Join Stimulus List in Slump - Bloomberg https://t.co/roGEgu0VTQ
  • With increasing volatility in weather patterns, how might storms, hurricanes and floods rattle the supply chain for petroleum-based products and impact crude oil prices? Find out from @JStanleyFX here:https://t.co/O4dgBl47fq https://t.co/OQYqZAYt9S
  • Currency Strategist,@PaulRobinsonFX is a Swing trader. What is your #tradingstyle? Take the quiz and let us know: https://t.co/LPBOcS0Vtd https://t.co/WzRYeqRhUL
  • Despite what your #tradingstyle is, you should be keeping a trading journal. How can you start keeping a trading journal? Find out: https://t.co/0akgWbyJEw https://t.co/4ehMlN4zv1
Gold Flirts with Breakdown Support - Outlook Mired by Macro Concerns

Gold Flirts with Breakdown Support - Outlook Mired by Macro Concerns

2015-07-10 20:30:00
Michael Boutros, Technical Strategist
Share:
Gold Flirts with Breakdown Support - Outlook Mired by Macro Concerns

Gold Flirts with Breakdown Support- Outlook Mired by Macro Concerns

Fundamental Forecast for Gold: Neutral

Gold prices fell for a third consecutive week with the precious metal off by 0.82% to trade at $1159 ahead of the New York close on Friday. The losses come amid a tumultuous week for markets as headlines out of Greece and China continue to fuel sharp movements in global equity indices. The dollar remains at risk after dovish commentary from the Fed weighed on interest rate expectations with the Dow Jones FXCM U.S. Dollar index (Ticker: USDOLLAR) responding to resistance up at 12008 early in the week. For gold, prices are at a make-or-break point of multi-year support with the short bias at risk while above this key threshold.

Minutes from the latest FOMC policy meeting showed increased concerns among committee members about the outlook for macro & domestic growth with several officials specifically voicing uncertainty over Greece, China and the possibility of weaker U.S. growth in the first half. The commentary comes just as the IMF lowered its global growth outlook to the slowest pace of growth since the financial crisis. With such headwinds facing the global economy, the decision to begin raising rates becomes much more difficult for the Fed with interest rate expectations likely to get pushed back further as concerns over contagion take root. In turn, advances in the greenback are likely to remain limited in the near-term which could offer a reprieve to the recent losses seen in gold.

Looking beyond the Greek headlines which remain the most significant event risk, the June Advanced Retail Sales report & the Consumer Price Index will be in focus next week. Sales are widely expected to have softened last month with consensus estimates calling for a print of just 0.3% m/m, down from 1.2% in May. Inflation data on Friday will highlight the docket and may have a more significant impact on gold amid expectations of an uptick in core CPI to an annualized rate of 1.8%. In light of last week’s Fed commentary, traders will be looking for continued strength in US data to validate the FOMC’s constructive outlook on domestic growth with the outlook on gold clouded by the ongoing drama unfolding on the global stage. That said, prices have approached a key support zone and heading into next week the focus will be on a break of the initial June opening range.

From a technical standpoint, gold tested a critical support range at 1142/51 this week. This region is defined by the 61.8% extension of the decline off the 2014/2015 highs, the March 2015 low and a longer-term 1.618% ext from the decline off the all-time record highs in 2011. Momentum has continued to coil up above this key support zone with daily RSI holding between 30-70 since March, its longest stretch since September of 2010. Weekly momentum is even more compelling with the longest stretch of ranging RSI since June of 2002. The lack of overbought / oversold conditions for such a prolonged duration of time suggests gold could be poised for the next “big” move in the coming weeks.

That said, the short-side remains vulnerable above key support near-term with initial resistance eyed at 1171. A breach above the yearly open at 1182 would be needed to suggest a more significant low has been put in with such a scenario eyeing objectives back into the 1200 mark. A break of support risks sharp losses for bullion with no significant support seen until 1105/10 backed by the 2010 low at 1044. Bottom line: the downtrend is at major support near-term and the immediate focus is on a break of the June opening range.

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

DISCLOSURES

News & Analysis at your fingertips.