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Gold Price, S&P 500, AUD/USD Forecast: How Might Retail Traders Behave Next?

Gold Price, S&P 500, AUD/USD Forecast: How Might Retail Traders Behave Next?

Daniel Dubrovsky, Analyst

Gold, S&P 500, AUD/USD, Trader Positioning - Talking Points

  • Will gold prices bounce as S&P 500 hits new highs?
  • IGCS seems to be pointing in that direction for now
  • Outlook for growth-linked AUD looking more choppy
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In this week’s session on IG Client Sentiment (IGCS), I discussed the road ahead for gold prices, the S&P 500 and Australian Dollar. IGCS is typically a contrarian indicator, a tool that I incorporated with fundamental and technical analysis. For a deeper dive into where these assets may go, check out the recording of the webinar above.

Gold Sentiment Outlook - Bullish

The IGCS gauge shows that about 82% of retail traders are net long gold. Exposure to the downside has increased by 7.66% and 6.10% over a daily and weekly basis respectively. Recent changes in sentiment warn that the current price trend may soon reverse higher despite the fact traders remain netlong.

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Gold Price, S&P 500, AUD/USD Forecast: How Might Retail Traders Behave Next?

Gold Technical Analysis

XAU/USD climbed to the ceiling of a Falling Wedge over the past 24 hours. This is typically a bullish chart pattern, where a push above falling resistance could open the door to extending gains. That would places the focus on the 20-day and 50-day Simple Moving Averages (SMAs).

XAU/USD Daily Chart

Gold Price, S&P 500, AUD/USD Forecast: How Might Retail Traders Behave Next?

Gold Chart Created in Trading View

S&P 500 Sentiment Outlook - Bullish

The IGCS gauge implies that about 37% of retail investors are net long the S&P 500. Upside exposure has decreased by 11.46% and 10.40% over a daily and weekly basis respectively. From here, the combination of current sentiment and recent changes offers a stronger bullish contrarian trading bias.

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Gold Price, S&P 500, AUD/USD Forecast: How Might Retail Traders Behave Next?

S&P 500 Technical Analysis

S&P 500 futures are pressuring the November 9th high at 3668, looking to extend the push further into all-time highs. Negative RSI divergence does show that upside momentum is fading which can at times precede a turn lower. That may place the focus on the 20-day SMA and September highs for support.

S&P 500 Futures – Daily Chart

Gold Price, S&P 500, AUD/USD Forecast: How Might Retail Traders Behave Next?

S&P 500 Chart Created in Trading View

Australian Dollar Sentiment Outlook - Bullish

The IGCS gauge shows that about 33% of retail traders are net long AUD/USD. Upside exposure has climbed by 13.76% and 7.92% from yesterday and last week respectively. Recent changes in sentiment warn that the current price trend may soon reverse lower despite the fact traders remain netshort.

Gold Price, S&P 500, AUD/USD Forecast: How Might Retail Traders Behave Next?

Australian Dollar Technical Analysis

AUD/USD is pressuring highs from September, making for a zone of resistance between 0.7343 and 0.7413. If this area holds, the 20-day SMA may come into focus for support. Otherwise, extending recent gains exposes the December 2017 low at 0.7502 followed by the June 2018 high at 0.7677.

AUD/USD – Daily Chart

Gold Price, S&P 500, AUD/USD Forecast: How Might Retail Traders Behave Next?

AUD/USD Chart Created in Trading View

*IG Client Sentiment Charts and Positioning Data Used from December 2nd Report

--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

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

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