Gold Prices Enter Hot Spot Near $1260; Yen Pairs Look Bullish
This is a recording of a US Opening Bell webinar from May 1, 2017.
In today’s US Opening Bell webinar, we discussed technical patterns on key markets. Gold prices are in a hot spot right now. There is a pattern that implies a strong burst higher and an opposing pattern that suggests a break down. We previously anticipated the up trend and it is possible that trend may now break down. $1260 is the key level in that above, the bullish pattern is still alive. On a break below $1260, the door is open for additional losses to $1246.
Gold may provide a teaser as to how the US Dollar may perform. A strong move in gold prices could be indicative of a broader US Dollar move. For example, in EUR/USD we are showing a collective of wave relationships and a resistance trend line coming in near 1.10. My initial bias would be to see EUR/USD reject on the first visit near 1.10. The after math of such a move would indicate if 1.10 is vulnerable to break higher or a break down.
The Yen pairs appear poised to drive higher over the medium term (JPY weakness). USD/JPY and EUR/JPY are two markets we are looking for higher prices on even after a minor dip lower. We have highlighted EUR/JPY last week and the week prior. A break outside of their respective price channels is confirmation the mood of those markets are moving to the bullish side.
EUR/JPY sentiment has plummeted driving the EUR/JPY exchange rate higher. Over the past 2 weeks, sentiment has flipped from +2.8 to -2.3 now. Sentiment is a good contrarian type of signal in a strong trend. Do you want to learn more about trading with sentiment? Grab this guide.
Fed funds futures are hinting at a rate hike in the June 2017. Read page 2 of our quarterly Yen forecast to see how Japanese Yen behaved in the past during Fed rate hikes.
---Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU
Follow me on Twitter at @JWagnerFXTrader .
See Jeremy’s recent articles at his Bio Page.
To receive additional articles from Jeremy via email, join Jeremy’s distribution list.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.