USD, Gold, SPX Price Action Setups (11.15.2016)
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- In this webinar, we used price action to look at the post-Election rallies that have been seen across global markets. Specific emphasis was placed on USD-related markets along with the various scenarios that traders may be able to look at/for in the coming months.
- We started off with USD/CHF as a USD-weakness candidate. The pair has been working with a rather rigid long-term zone of resistance, and of recent has just perched above that resistance to set a fresh 8-month high. But, if the Dollar sees resistance and begins to give back some of the move, the setup in Swissy could be an attractive way to look for that USD-weakness. We discussed the setup at more length in the article, Vigorous Bounce Off of Support.
- We then moved on to look at a possible top-side move in GBP/USD. While the Dollar has been rampantly strong with the post-Election backdrop, GBP/USD has continued to put together a bullish formation on the daily and 4-hour charts. Given that this move is happening after the Bank of England nudged inflation expectations lower, this top-side move could be emblematic of a ‘bigger picture’ move, particularly in the event of USD-weakness. Last week, we asked of GBP/USD whether a ‘New Trend (was) Setting In,’ and follow-thru information has been supportive of that thesis, thus far.
- On the USD-strength side of the equation, we first looked at USD/JPY, as the prospect of continued divergence between these two economies’ Central Banks could continue further. The difficulty with entering USD/JPY at the moment is the fact that the recent movement has been pretty much straight-up with little retracement to use for stop placement. We had discussed potential support levels for bullish re-entry in this morning’s Market Talk entitled, As Election Euphoria Fades, Attention Averts Back to the Fed.
- We also looked at USD/CAD for USD-strength scenarios, as the prospect of continued monetary divergence exists here, as well, particularly in the event of an extended run in the Greenback.
- We then moved on to look at Gold. Gold appears to be attempting to carve out support, but just below current support is a critical long-term Fibonacci level at $1,200. To read more about the current setup in Gold, please check out our article, Gold Prices Rush Towards Pivotal Support Zone.
--- Written by James Stanley, Analyst for DailyFX.com
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