Trading Outlook: Weaker US Dollar, Stronger Gold/Silver Prices, Higher Stock Indices
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After seeing the US Dollar Index (DXY) break hard in line with a technical sequence it formed prior to the FOMC meeting, the stance remains tilted lower into next week. Support arrives 1-1.5% lower. EURUSD and USDJPY are the primary targets, followed up by GBPUSD. AUDUSD surprised with its 2% rip, but will soon square off with resistance we would like to see overcome before becoming bulled up on.
Cross-rates we looked at were EURAUD (another possible bearish tech formation taking shape), GBPJPY (descending wedge could come into play), and AUDNZD (been a nice run, would like to see constructive price action before looking for another leg higher). We also looked at EM currencies as well; USDMXN dropped into support in line with our recent trade set-up and USDZAR renews weakness after a fake-out to the top-side.
Crude oil is caught between a pair of longer-term trend-lines and could use some time to work off short-term oversold conditions before eventually moving lower.
The DAX is at a make or break point, with a rising wedge formation fully developed – we’re just now waiting for the break. The S&P 500 held the confluence of trend-lines we’ve been focusing on, looking for that to continue and hold a generally bullish stance. The FTSE is heading into some top-side trend-lines, but maintains a nice sequence of higher lows and higher highs. The Nikkei 225 continues to coil up, but lags…we’re waiting.
For full technical considerations, please see the video above.
---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.