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
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • What is the outlook for financial markets ahead of the first presidential debate and how are Democratic nominee Joe Biden and President Donald Trump doing in the polls? Find out from @ZabelinDimitri here:https://t.co/QQwAZTxZFg https://t.co/4cRhRCiv3C
  • The US Dollar could gain as it forms bullish technical formations against the Singapore Dollar and Malaysian Ringgit. USD/PHP may have bottomed, will USD/IDR rise next? Find out from @ddubrovskyFX here:https://t.co/3UIKmbLIvD https://t.co/PY2YyH4vkQ
  • 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 $USDINR market update from @ddubrovskyFX here:https://t.co/3wsYlSxd26 https://t.co/z2qB9p8IgX
  • A proxy of #EmergingMarket capital flows hit its lowest since July, falling with the #SP500 after some divergence This is as #USD gained against its developing FX counterparts, highlighting potential risk of a spillover outwards Stay tuned for next week's #ASEAN fundy outlook! https://t.co/kAvpnb0EXO
  • 4 consecutive down weeks for the #SP500, last matched over a year ago #Fed balance sheet continues to gain very cautiously, now at its highest since the middle of June. Still, at slower pace than last week Focus shifts to US fiscal stimulus next week in the House of Reps https://t.co/f8zpSILm86
  • #Gold prices have broken lower and while the broader technical structure is constructive, the risk remains for a deeper correction before resumption. Get your $XAUUSD technical analysis from @MBForex here: https://t.co/7p3jPx6nQd https://t.co/nnCSdt6OV5
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.00% 🇳🇿NZD: -0.02% 🇯🇵JPY: -0.15% 🇨🇭CHF: -0.23% 🇦🇺AUD: -0.25% 🇪🇺EUR: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/O8Qb7OHZza
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: -0.30% Gold: -0.33% Silver: -0.92% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/lEALo4Z1M9
  • The S&P 500 breakdown is testing the first major zone of support and we’re looking for a reaction. Get your S&P500 technical analysis from @MBForex here:https://t.co/JrTNmQ5c7g https://t.co/D79T1134P9
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.29%, while traders in EUR/GBP are at opposite extremes with 65.04%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/lzTHuIgzFQ
Gold Prices Channel Deeper into Bull Flag Formation

Gold Prices Channel Deeper into Bull Flag Formation

2016-09-14 13:51:00
James Stanley, Strategist
Share:

To receive James Stanley’s Analysis directly via email, please sign up here.

Talking Points:

  • Gold Technical Strategy: Longer-term up-trend still alive, near-term bearish channel (bull flag formation).
  • Gold prices are moving lower as investors have responded to a recent uptick in hawkishness from the Federal Reserve.
  • If you’re looking for trading ideas, check out our Trading Guides. And if you want something more short-term in nature, check out our SSI indicator.

In our last article, we looked at Gold prices after a $50 ramp-higher in the previous four trading days. But as we noted, this had merely brought Gold to a ‘lower-high’ point of resistance, and with a Federal Reserve that had been transmitting a concertedly hawkish tone, prices could be due for a correction to the downside. Since then, we’ve seen Gold move lower by ~$32 as continued hawkish commentary drove US rate expectations higher in front of next week’s FOMC meeting.

Over the medium term, as in since mid-July, Gold prices have been confined within a downward channel as defined by the upper trend-line on price action that can be found by connecting the July highs with the August highs. Given the boost-higher leading into this down-ward sloping channel, this would equate to a bull flag formation, which is often emblamatic of an up-trend in the process of consolidation before it’s next move in the trend-side direction. We look at this bull flag currently showing in Gold prices on the chart below:

Gold Prices Channel Deeper into Bull Flag Formation

Created with Marketscope/Trading Station II; prepared by James Stanley

As we’ve noted numerous times throughout this year, Gold prices are very much being driven by FOMC rate-hike expectations. After the Fed capitulated on the ‘four hikes in 2016’ expectation, Gold prices caught a major bid in February, breaking out of the 2+ year bearish channel. Each time the Federal Reserve has displayed dovishness (passive towards future rate hikes), Gold prices have popped higher. And now with the Fed talking up rate hikes, whether it be in September or December, Gold prices are softening down to levels of intermediate-term support.

The driver for higher Gold prices will likely be the Federal Reserve taking making another dovish move: The big question is when this might happen, and how. While few are expecting any actual movements at next week’s meeting, if the Fed takes on a hawkish stance with eyes towards a hike at their December meeting, very similar to what happened last year; Gold prices will likely be heading for an even deeper retracement. This could expose longer-term support levels at $1,301 (which was also near the September swing-low), or the zone from $1,279-$1,286.

However, for those looking to take on a short-USD stance going into FOMC, near-term support structure will be of critical importance in setting up the bullish position. This morning’s swing low printed above the prior swing low from earlier in September. Should price action respect this higher-low going into next week’s meeting, we could have the makings of a bullish reversal.

Gold Prices Channel Deeper into Bull Flag Formation

Created with Marketscope/Trading Station II; prepared by James Stanley

--- Written by James Stanley, Analyst 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