Trading Outlook for USD-pairs, Gold/Silver Price, DAX & More
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Today, we started out by looking at the bounce in the US Dollar Index (DXY) and its sustainability. The index touched off into the top of a support zone extending lower from around 93 down to just under 92, dating back as far as 2015. It’s an area of interest for sure, and with yesterday’s surge a bounce could very well be under way. EURUSD, as 57% of the DXY, obviously was a major contributor to the bounce. The euro may not fall apart here, but a correction at the least looks to be underway. GBPUSD is wedging up and could soon lead to an explosive move. USDJPY is testing key trend-line support back to September; expectations are for a rally from here. AUDUSD put in a sweet reversal bar on the daily and dialing in on 1-hr we looked at the possibility of breaking solid support and opening up a path lower for the short-term trader.
We took a look at a several cross-rates, one of interest was CHFJPY as we were looking at that the other day as a short. It certainly exceeded expectations on the downside. EURCAD on the other hand was another short prospect which isn’t working out as anticipated, but the next few days could be important as it trades into a tangle of resistance. USDMXN is on the radar as a short with 17.90 eyed as an area to turn lower from.
Gold and silver are both at key inflection points, especially the former. The 2011 trend-line is highly visible again as resistance at this time. Silver reached a confluence of resistance and put in a key reversal candle yesterday, which suggests it should move lower from here. The 2003 trend-line sub-15 remains the target.
The crude oil rally continues, but now comes upon a test of trend-line resistance. Overall, the handle on this one has been lost and we’ll stand aside until further clarity is gained.
Stock indices are still a mixed bag, but the DAX and CAC 40 look destined to finally fill those glaring April gaps. The DAX is on the verge of triggering a head-and-shoulders top and on that we could see the index shed some weight beyond the gap-fill. The S&P 500 and Nasdaq 100 both took shots yesterday. The NDX volatility index – VXN – has been generally rising since March while the Nasdaq rallies. The growing instability in the index with it taking shot across the bow #2 (#1 was the Goldman Sachs note on 6/9) suggests risk for a major down-draft is rising. We are entering into a seasonally weak time of the year and expect this fall things could get a little wild.
For full technical considerations, please see the video above…
Check out our Q3 Forecasts for our take on where markets are heading.
---Written by Paul Robinson, Market Analyst
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