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Today, we took a look at the US Dollar Index (DXY) coming off a confluence of resistance consisting of a downtrend line off the April peak and a swing-high from May. EURUSD is holding support in the 11100s, and as long as it continues to hold the bias remains constructive. One-week implied volatility (IV) is at a low 5.47%, meaning volatility is expected to very low over the coming week. GBPUSD is bouncing around between support and resistance.
Cross-rates we took a look at were EURAUD, EURNZD, GBPAUD, GBPNZD, in addition to a few Yen crosses. USDMXN is heading lower off a trend-line we noted on Wednesday, while we are still waiting for USDZAR to set up again from the short-side.
The price of gold and the US dollar have been trading with a strongly negative correlation, and recently came into the unique situation of the US Dollar Index (DXY) trading are resistance while gold simultaneously traded at support. Thus far the confluence is working out as anticipated.
Crude oil continues its weak ways, and we expect over the coming weeks for more weakness to follow. So far it has played to script for the shorts, but a broader bounce may soon develop before resuming lower.
Equity indices are teetering, but are still holding support. The S&P 500 is trading at a key slope, while the DAX is treading at the bottom of an ascending wedge we’ve been focused on. The FTSE 100 is trying to hold major support.
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---Written by Paul Robinson, Market Analyst
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