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EUR/USD is finding buyers at an important confluence of support and needs to continue holding for a neutral to bullish outlook to remain. Euro and GBP crosses are at or failing support, hinting at more downside. Gold nearing resistance on bounce.

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Highlights:

  • EUR/USD finding buyers along an important confluence of support, needs to hold to keep outlook neutral to positive
  • Euro and GBP crosses are near or declining below support levels
  • Bounces in gold and silver have them facing off with resistance levels

EUR/USD continues to make good on holding a confluence of support around 11700 and the trend-line running higher since April. The bounce off the trend-line gives it added importance. There isn’t any expectation of tremendous momentum coming in, but as long as support holds then so does a neutral to bullish outlook.

EUR/USD: Daily

EUR/USD daily price chart

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GBP/USD found buyers at a good level of support around the 13300-mark and holds a positive posturing, but, like EUR/USD, expectation of big momentum coming in at this time is muted. AUD/USD is putting in an impressive bounce at this time, but how long it can hold is questionable. NZD/USD is nearing a cross-road of resistance in the 7940/60 vicinity, where resides the underside of a 2-year+ trend-line lies along with horizontal levels. USD/CAD remains stuck in a range from ~12665-12915 and is need of a resolution before becoming too geared up. Trading in the middle of a range offers no edge here.

EUR/AUD triggered the ‘head-and-shoulders’ we looked at on Wednesday, but is now nearing solid support. It’s time to be more cautious with short positions given there is trend support, but if it is to follow EUR/NZD, then a break of that trend-line may be around the corner.

GBP-crosses are failing to hold the support levels we looked at the other day, and with that some more weakness looks to be in the cards. Specifically, GBP/AUD and GBP/NZD look most vulnerable. GBP/CAD is hanging onto support, but at risk of breaking down with the other two.

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GBP/NZD: Daily

GBP/NZD daily price chart

Gold and silver have experienced strong bounces, alleviating oversold conditions. Gold could carry a little higher into the 1260s before finding trouble, while silver already has at the area around 16.15, which marks swing-lows from May and August. Trend and resistance favor more weakness.

Silver: Daily

Silver daily price chart

Global indices remain on the difficult side. The S&P 500 is pulling back from a key top-side slope, but giving trend and seasonality the benefit of the doubt it’s likely we see another ‘buy-the-dip’ scenario play out. The DAX has been stuck in a volatile range for a month now, and until it breaks free from its chains the outlook remains neutral.

For full technical considerations, please see the video above…

---Written by Paul Robinson, Market Analyst

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