Technical Focus – US Dollar, Yen-crosses, Gold Price, DAX & More

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The US Dollar Index (DXY) has taken a hard hit since the FOMC meeting, but still has room to go to sub-99 before it may find meaningful support. EURUSD is trading into a bit of resistance, which is why we are now favoring GBPUSD more to the top-side given it's cleared a couple of meaningful technical events. USDJPY is on the brink of breaking down in meaningful fashion, but still needs to scoot a little further lower to help further cement this view. Yen cross-rates in general look vulnerable with a ‘risk-off’ environment helping to underpin more weakness. GBPJPY has a nice-looking descending wedge on the verge of breaking.

Gold and silver don’t have the strongest technical backdrops for arriving to conclusions, but if we continue to see a solid offer in USD, then at the least they should hold up and trade higher. It’s worth noting, though, that not far above around 1250 lies a good line of resistance in gold.

Crude oil is trading between a pair of longer-term trend-lines, with a key reversal day taking shape last week off the one. A break below the reversal-day low opens the door up for a move to around 45, then lower towards the 43/42 area.

The DAX was a big focus heading into this week, and continues to be. It broke hard yesterday from a clear rising wedge, which suggests we are in for more selling ahead. The CAC 40 is shaping up similarly as it looks to decline further off a 16 ½ year trend-line. U.S. indices broke very hard yesterday and we look for momentum to carry them lower in the near-term. The Nikkei took out the under-side trend-line of an ascending wedge it had been building, putting it in position to add to yesterday’s 2% losses.

For full technical considerations, please see the video above.

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---Written by Paul Robinson, Market Analyst

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