Trading Outlook for USD, JPY-crosses, S&P 500/DAX & Crude Oil
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Today, we reiterated a bearish bias for USD, with the US Dollar Index (DXY) still having some room to go before it arrives at meaningful support. USDJPY has been extremely weak, now trading below prior support; with this also comes a bearish tilt on the crosses. More ‘risk-off’ in equities will only strengthen the case for shorts in AUDJPY, NZDJPY, CADJPY, and others. GBPJPY is still hanging out in a descending wedge, having yet closed outside of it on a daily basis yet.
Gold and silver prices are sort of stuck at the moment. Gold is up against a trend-line running down from August, while silver trades in open space. Despite gold trading at resistance it may not immediately decline if USD declines as anticipated. Silver is being left alone at the moment.
Crude oil is trading between two trend-lines, which is keeping it bottled up at this time. It has had two key reversal events recently, but despite these bullish occurrences it is failing to find momentum to the upside. A break below those recent swing lows should bring into play support just beneath 45, with a deeper target coming in the 43/42 area.
Global indices look vulnerable. The DAX broke hard from an ascending wedge, but had a solid recovery yesterday. The picture is still bearish as long as it turns lower soon. Same goes for the CAC which is trading just beneath a 16 ½ year trend-line. U.S. indices aren’t finding much buying after Tuesday’s drop, still leaving the market postured for further losses in the near-term.
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.