The US Dollar Index (DXY) outlook is unchanged from when we looked at it on Wednesday, targeting higher levels in the days ahead. GBP/USD has shown very little buying interest, eyes towards next support levels. Gold range-break bolsters bearish case towards 1240.
Technical Highlights:
- US Dollar Index (DXY) remains bullish
- GBP/USD price action quite week, ~13300 looks next
- Gold range-break has momentum tilted down
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US Dollar Index (DXY) remains bullish
The outlook for the US Dollar Index (DXY) remains the same as it did when we discussed it on Wednesday, higher prices are in store. There is a little room left to the next area of resistance around 94, where several inflection points from August to December developed.
How it reacts there will be our cue as to whether it can take out resistance or if we should take a cautionary stance on dollar longs. The trend-line rising up over the course of this drive higher is viewed as a potential spot for short-term long positions as long a sit holds.
DXY Daily Chart (~94 up next)
For the intermediate-term fundamental/technical outlook, check out the Q2 Forecast for USD
GBP/USD price action quite week, ~13300 looks next
GBP/USD is effectively sitting ‘dead in the water’ as attempts to rally over the past couple of weeks are quickly swatted down. This has lower prices looking likely in the days ahead, with the area surrounding 13300 as the next targeted objective for shorts. A move below this steady area of support will have the 13000-line in focus.
We also looked at GBP/AUD and its bearish stance, along with a few other GBP-pairs (GBP/CAD, GBP/NZD & GBP/JPY) which aren’t positioned quite as weak, but certainly vulnerable as we head into next week.
GBP/USD Daily Chart (Very Weak Price Action)
For the intermediate-term fundamental/technical outlook, check out the Q2 Forecast for the British Pound
Gold range-break has momentum tilted down
Gold got blitzed the other day, sending it through the bottom of the range in place since day one of the year. It is currently assaulting the December 2016 trend-line, but with the range-break of more importance, the trend-line looks likely to be unsubstantial in keeping gold from declining further.
On further weakness, the targeted objective is down around the December low situated just under 1240. Weakening gold prices is consistent with a strengthening dollar thesis. Keep in mind the correlation between the two if holding positions in both markets as holding opposing positions is effectively doubling up on the same trade.
Gold Daily Chart (Range broken, testing trend-line)
For the intermediate-term fundamental/technical outlook, check out the Q2 Forecast for Gold
We also looked at USD/JPY, AUD/USD, NZD/USD, USD/CHF, USD/CAD, EUR/JPY, NZD/JPY, S&P 500, DAX, FTSE, and US crude oil.
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
