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Today, we discussed a few market dynamics and potential plays to be made in the days to follow. The US dollar (DXY) is hanging out at 13+ year highs above prior peaks created in 2015. A period of digestion without violating support levels would be constructive in the days to come. We took a look at EURUSD, GBPUSD, AUDUSD, and USDJPY charts for levels and trading considerations to take advantage of in the event of further dollar strength. EURAUD is a cross-rate we have on the backburners should certain developmets play out.
Gold and silver continue to trade with an extreme inverse correlation to the dollar, and to their detriment will likely suffer further losses as a result. Gold has some support not far below, but silver still trades in an air pocket until it finds support around the 16 mark.
Crude oil followed through on the inverse head-and-shoulders pattern we looked at last week, but faces key resistance and looks poised to pull back at the least, with potential for a material decline to develop.
Global indices are a bit mixed, with the U.S. trading at record highs, while Europe treads water. The DAX is attempting to consolidate below key resistance around 10800, but needs to hold support below 10600 in order to have a shot at new highs for the year. The FTSE is rising off noted trend-line support, but will quickly come upon on its own zone of important resistance.
Towards the end of today’s session, we even touched a little bit on some psychological aspects to being a trader.
For full details, please see the video above.
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinonFX.
