Technical Outlook: US Dollar, Cross-rates, Gold/Silver, Crude Oil & More
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In today’s webinar, we took a look at where markets lie ahead of the January jobs report, but focused more on charts of interest and potential trade set-ups looking out over the next week.
The US Dollar Index (DXY) continues to etch out lower highs and lower lows on the 4-hr since peaking at the beginning of January, and continues to break support levels in the process. Looking at the daily chart, we had a nice bullish key reversal bar yesterday, which suggest near-term strength. But, again, the month-long downtrend remains in place and for as long as it does we remain in the bear camp. A break of the lower high, lower low sequence will call for a change in this bias. We took a look at several USD-based pairs, primarily focusing on EURUSD, NZDUSD, and USDCAD. Also, we covered several cross-rates; GBPNZD, EURNZD, GBP/JPY, as well as a few others.
Precious metals are finding difficulties in extending the advance since December. Silver, in particular, is at an interesting juncture with a bullish bottoming formation in play, but bumping up against the July trend-line. How silver plays out at that trend-line will determine whether the inverse H&S formation has legs or fails and brings in the possibility of the 7-month downtrend resuming.
Crude oil continues to be a choppy mess of a market, but there are signs in price action as well as futures market positioning which suggest it is forming a top. We need to see cleaner price action before drawing concrete conclusions, but the stage is set.
Global indices remain in a difficult trading environment. The S&P 500 has support below which will help keep the market propped up, but it’s unclear when the choppy trading environment will clear up. The DAX broke out recently only to reverse those gains in short-order. It also has support not far below to keep an eye on. Generally speaking, for now, we’re steering clear of indices until the picture becomes cleaner.
---Written by Paul Robinson, Market Analyst
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