Weekly Technical Forecast: Dollar Breakouts Fall Apart While Equities and Oil Rallies Stumble
Despite what implied volatility readings suggest, markets are showing greater volatility in actual price action. From the tentative turns in the Dow and crude oil to the persistent waves of nausea in FX activity levels, traders should remain vigilant and question the heft of nearby technical boundaries.
The bullish 2019 trend in Oil prices finally found some resistance this week at the $60-handle, at which point a bearish formation printed. But will buyers completely step back ahead of the Q2 open?
The Pound exhibited extraordinary volatility these past weeks as the markets chewed over Brexit uncertainties. As uncertainty prevails, a breakout will be tough to secure; but exceptional volatility will eventually lead to a break.
Unfortunately, the Federal Reserve does not speak in a vacuum. Despite their desire for a weaker US Dollar, the rest of the world seems to see US assets (and thereby) the US Dollar as a likely haven from global weakness, which could potentially frustrate the Fed’s plans.
Gold is trading higher within a channel which keeps short-term momentum edging upward, but a breakdown may soon usher in sellers.
A mid-week rally in EURUSD, on the back of a short-lived US dollar sell-off, was quickly re-traced with the path of least resistance for the pair likely lower in the short-term.
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