Webinar: Markets Likely to Keep Trends Intact for Now (DAX, S&P 500, DXY, Gold)
Join me next Wednesday (12/28) for the year’s final session, where we will take a look ahead to January.
In today’s session, we discussed the quiet market conditions which are upon us with the holiday season going into full swing. Several trends into year-end are poised to remain intact in the absence of a good reason for a significant reversal.
Looking at the US Dollar Index (DXY), it’s at elevated levels, but looks headed for sustaining a bid on dips until the calendar flips. EUR/USD is trading below key long-term resistance and likely headed lower with top-side levels to keep it subdued. AUD/USD, NZD/USD have made strong moves, breaking good support levels, which now turns those into resistance. There is still room to the downside, keeping those two pairs front and center. USD/JPY is caught between pretty solid resistance and support. It’s likely to stay bid, but has its work cut out for it near 119 if it’s to continue higher. In the 116 area lies support. EUR/AUD is a cross we have been watching closely in recent weeks; a bearish descending wedge is still taking shape, but unlikely to break through the bottom-side (if it is to do so) until January.
Gold remains weak and has a short-term line of resistance which has received good price action around. Looking for it to maintain below for further weakness. Yesterday, silver looked headed to enter another air pocket below 15.80 and headed towards sub-15 levels, but reversed course as it broke lower. The reversal day was an excellent example of why waiting for a the close of a bar below support or above resistance is prudent when looking for a breakout beyond key levels.
Crude oil found support on the Feb trend-line recently, back above intermediate-term levels. It’s a bit indecisive here, we will need to wait for further developments before drawing any concrete conclusions.
Global indices remain well-bid and are likely to stay so through year-end. Any dips which develop in the Nikkei, DAX, FTSE 100, and S&P 500 will in all likelihood be met with buyers in the absence of a catalyst to turn their trends.
---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.