Trading Outlook for US Dollar, JPY-pairs, Gold, Oil & More

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The US Dollar Index (DXY) continues the grind within the confines of an upward sloping channel; has a corrective look to it (bear-flag potential). It could take some time before making a material move but a probe deeper into long-term support may soon be upon us. With that said, the euro is working off overbought conditions from resistance and in reverse of the DXY readying itself for another move higher down the road. Overall, the feeling is that given the lack of love for the dollar and where it around major long-term support, that any break lower may prove to be terminal and a tradeable low will be found.

GBPUSD is sitting on trend-line support, but not showing much buoyancy. A move to the mid-12700s would be of interest as there is longer-term support in that area. USDJPY is on the move lower again, and overall, despite being near support again, looks like it could slip further.

EURJPY turned down from a confluence of resistance we discussed the other day, bringing the ‘head-and-shoulders’ topping possibility into play. It’s at neckline and longer-term support right now, but a clean break should kick off another leg lower. Must wait for confirmation first. GBPJPY put in double rejection bars this week, which has the pair aiming lower with room until support levels arrive. The EURGBP set-up consisting of a rising wedge into major resistance is still on the table, just waiting for confirmation before moving forward with a short bias.

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Gold is trading around a major level near 1300, and should we see a breakout above, with it already trading well above the 2011 trend-line, a much broader move higher could ensue. Silver to follow, but not likely with as much confidence.

Crude oil is treading around the 47-line, a big area. A break from here looks likely to see a sell-off towards 45.50, sub-44, and worse develop.

The S&P 500 broke hard yesterday, putting into place a lower high and lower low from recent levels. It is sitting on a trend-line from back in December and will need to shape up soon, or else a drop towards 2400 or worse becomes the threat. The DAX is still postured bearishly as long as it maintains below the 12300-area, a spot where sellers have been firmly in control.

For full technical considerations, please see the video above…

---Written by Paul Robinson, Market Analyst

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