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  • Gold could suffer further near-term losses due to rising U.S. Treasury yields and a weak technical picture for price action. Get your weekly gold forecast from @DColmanFX here: https://t.co/g9QvH3L4It https://t.co/Vz98E0Bl9U
  • Gold has been trending lower after failing to clear resistance in the $1835 area earlier this month. Get your $XAUUSD market update from @DColmanFX here:https://t.co/3hm1g3BHgf https://t.co/MdTQKEBCBx
  • Key break here in the 10-year #Treasury yield as it rises to the highest since late June Took out 1.4230 resistance, and the 100-day SMA Eyes now on the 38.2% Fib extension at 1.4775 Also potential falling resistance from March https://t.co/4cI6l210ui
  • The move in rates after this week’s FOMC has continued and the 10 year yield has pushed up to a fresh two-month-high. Get your market update from @JStanleyFX here:https://t.co/CRWhuZ3sxD https://t.co/svHHqN2Zz8
  • S&P 500 contending with its proverbial ‘line in the sand’ as bulls and bears battle for directional control. How we close/trade around the 50-day moving average could serve as a noteworthy bellwether for risk trends headed into next week. I remain cautious below ~4,480. $SPX $ES https://t.co/qogkjs1Sx2
  • USD/JPY trades to a fresh monthly (110.57) amid the pickup in longer-dated US Treasury yields, and the exchange rate may stage a larger advance over the coming days. Get your market update from @DavidJSong here:https://t.co/dlNXOrJnM9 https://t.co/LCQd26W1zF
  • US yields continue to climb, with the 10-year Treasury yield trading above 1.45% $ZN $ZB https://t.co/N4EDfwD3nZ
  • $USDJPY bull thesis appears quite constructive. Technicals show topside breakout above trend resistance following a period of consolidation. Bond yields providing the fundamental catalyst. Eyes on Aug/YTD highs. A broad-based deterioration in market sentiment poses downside risk. https://t.co/AazskXGjHq
  • WTI posting another session of strong gains, currently flirting with the 74 handle $CL #Oil #OOTT https://t.co/oYnm2OYRky
  • The New Zealand Dollar’s bullish breakout attempt in early-September was rebuffed. Price action at the end of the month is telling a different story. Get your market update from @CVecchioFX here:https://t.co/AquMSrssne https://t.co/DtFuFfrS7Q
Trading Outlook: Euro & Yen Topping, Sterling Not Just Yet

Trading Outlook: Euro & Yen Topping, Sterling Not Just Yet

Paul Robinson, Strategist

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Today, we placed a lot of our time oexamining EURUSD, GBPUSD, and USDJPY. The euro is trading at very key long-term levels extending back to 2010/12, and doing so in a fashion which is demonstrating diminishing momentum. The narrowing momentum is taking the shape of a rising wedge. There is a trend-line highly visible on the 4-hr chart which is keeping the euro pointed higher, but with each touch it is weakening. The anticipated price action to unfold soon is for a break of that trend-line. Looking at GBPUSD, it’s been a beast recently. There is solid resistance in the 13400/500 area from last year, which also roughly aligns with a key upper parallel belonging to a trend-line from which the current rip began. It’s an area of interest for shorts should we see a reaction up there. Perhaps the BoE meeting tomorrow will helps spur cable towards noted resistance.

The USDJPY breakdown to conclude last week looks to have been a bear-trap sprung with the gap to start the week. The gap and strong surge back above support surrounding 10800 suggests we could see further momentum. Each spring higher in recent weeks has quickly failed, and should we not see an immediate decline set in then a change of character will be underway and higher prices become the likely outcome. Higher prices look to be in store for yen crosses (EURJPY, GBPJPY, CADJPY were examined the closest). A strong weekly close in CADJPY will trigger a macro inverse ‘head-and-shoulders’.

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We also took a look at a developing wedge in USDMXN below 18, which could break in either direction, but the trend suggests a break lower would make for an ‘easier’ trade. USDZAR broke a smaller triangle and is in the process of carving out an even larger one. Will need to wait on this one. EURGBP has fallen sharply from the failed ascending wedge breakout and broke one trend-line of support. A smallish bounce is viewed as a signpost that more losses are to come down towards a big area of support around 8850.

Gold reversed lower from some levels carved out in 2016 and a trend-line dating back to 2013. Large speculators have been taking down contracts during the recent run at a clip which suggests they may have gotten ahead of themselves. Looking for rallies to struggle.

Global indices outside of the FTSE 100 (which is stuck in a range) look poised for higher prices. We looked at the S&P 500, DAX, CAC 40, and Nikkei 225.

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.

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