The U.S. Dollar Index (DXY) is positioned is trading at a solid level of resistance with FOMC and NFPs this week. The Euro is holding ground at support, but can it last? GBPUSD is below long-term trend-line support but may have a bounce in it soon. Gold price is holding onto support, but needs to stay there or start moving higher else it risks a pattern reversal that could lead to a swift down-move
Technical Highlights:
- U.S. Dollar Index (DXY) trading at solid resistance
- EURUSD holding onto support for now
- GBPUSD trading below long-term trend-line
- Gold price still holding onto support
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U.S. Dollar Index (DXY) trading at solid resistance
The U.S. Dollar index is trading into resistance from April and May, over the 98-threshold. Heading into tomorrow’s FOMC meeting it could mark an important spot (to a lesser degree of importance, NFPs are on Friday). The pattern has been for extended moves (even smallish ones) to reverse, especially at levels. This makes it a tricky spot in time and price. In a holding pattern for now.
US Dollar Index (DXY) Daily Chart (at big resistance)
EURUSD holding onto support for now
The Euro posted a Long-legged Doji at support over 11100, which is keeping it afloat for now. A bounce may develop, but skeptical on how much power it can have given the general trend/tone. An eventual breakdown seems to be nearing, but need to clear through underside levels and trend-lines down to sub-11000 before momentum can kick in.
EURUSD Daily Chart (gunning for 11100 or worse)
GBPUSD trading below long-term trend-line
Cable is trading below the October 2016 trend-line, working towards lows create in 2016/17. The shot lower form the falling wedge could have gone too far too fast, watch for a snapback soon. Risk/reward from either side of the tape isn’t particularly appealing for new positions.
GBPUSD Daily Chart (Oct ’16 t-line broken)
Gold price still holding onto support
Gold price is trying to lift off the top-side trend-line of a wedge it recently broke down from, breaking out of a smaller wedge that was just built on top of the top-side trend-line. Support is support until it’s not. But a breakdown below the underside trend-line of the broader wedge would be reason to look for gold to go in reverse, and quite possibly with a good amount of force.
Gold 4-hr Chart (breaking out of wedge on top of wedge)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
