Trading Outlook for the Dollar, Cross-rates, Gold & Equity Indices
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The US dollar looks poised to continue on higher in the very short-term before it runs into resistance in the vicinity of 93.83/94.15. From there a pullback may develop, but given the long-term zone of support the bounce is starting from a larger rebound could then take shape.
US Dollar Index (DXY): Daily
EURUSD broke through the neckline of a ‘head-and-shoulders’ top along with the April trend-line which had been keeping it supported. There is room to go before arriving at a support zone from 11724 down to 11662.
GBPUSD is following through on a major rejection at the gap-fill from the day after ‘Brexit’ and a trend-line bearing down from 2014 over the ‘Brexit’ day high. It has support right in the area, but a close below 13400 opens up a door towards the 8/3 peak at 13264. We also took a look at USDJPY and AUDUSD, of which both have room to go before finding opposition. USDCHF is already at an area of resistance around 9760, while USDCAD is challenging confluence of trend-line resistance by way of an underside trend-line retest from 2012 as well as slope running down since June. These are two to be cautious on already for more follow-through.
USDMXN is trading out of a symmetrical triangle pattern we’ve been honing in on and we’ll run with the top-side break with the next real level of resistance not arriving until 18.39.
GBPAUD was recently rejected from 17150 and is currently looking to retest that area. If it can put in a lower high a short opportunity may develop on confirmation of the rejection seen last week. We also looked at several of the Yen-crosses (EURJPY, GBPJPY, AUDJPY, CADJPY, and CHFJPY).
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Precious metals continue to look vulnerable. Silver is maintaining below strong resistance in the low-17s, looking for 16.71/56 as next up. Keep an eye on gold around the 1288 level, a close below clears a path to 1275 as the next level of support. Crude oil is struggling around the 52-area, with both horizontal and trend-line resistance in the area. Large rises and declines have been reversed going back to early 2016, and on that we look for a pullback at the least to develop from here.
(Commodities/equity indices begin here in the video.)
The DAX is maintaining good form and testing the July swing-high, while the CAC continues to look overall bullish after a bull-flag breakout earlier this month. The FTSE continues to struggle around 7300, and as long as it stays below it is the go-to market for near-term short set-ups. As long as the S&P 500 holds above Monday’s reversal-day low at 2488 we look for higher prices or a consolidation at the worst to take shape.
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.