Chart Outlook– USD Index, GBP/USD, USD/JPY, Gold Price & More
The US Dollar Index (DXY) is treading water around the November peak, a breakout may be on the way, or have to wait first. GBP/USD still has room to go on the downside before finding support. USD/JPY is wedging up, with a little more time ready to make a move. Gold continues to move lower in-line with expectations, more weakness looks to be in store.
- USD index (DXY) at risk or pullback around November high
- GBP/USD has room to decline until support is met
- USD/JPY is coiling up between important thresholds
- Gold price expected to continue to weaken
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USD index (DXY) at risk or pullback around November high
The US Dollar Index (DXY) is currently trading a shade higher than the November high, but appears at risk of a pullback in the near-term with the index’s largest constituent, the euro, trading around a significant support level.
A pullback would be a welcomed event, though, as trend support could help post a higher-low in the index and alleviate any short-term overbought conditions which exist. The current stance isn’t bullish for new longs, but isn’t bearish either. Wait-and-see mode.
US Dollar Index Daily Chart (trying to clear November high)
GBP/USD has room to decline until support is met
GBP/USD is still in a full-on bearish trend and with a lower-low having taken shape yesterday, support around the 13050/25-area is viewed as next up. There isn’t anything visible preventing it from reaching this zone, but even as such new positions may be at risk of a short-term bounce. Existing shorts still look relatively safe to sit with if entered at good levels. Keep in mind we have event risk tomorrow via the BoE; to follow the announcement live, you can join Martin Essex at 10:45 GMTG time.
See the IG Client Sentiment page for how sentiment changes can help you better gauge market direction.
GBP/USD Daily Chart (Room to go before hitting support)
USD/JPY is coiling up between important thresholds
USD/JPY is ‘neither here nor there’ at the moment, but with a little more time price could coil up between a pair of important technical thresholds. On the top-side there is trend-line and price resistance in confluence, and on the underside there is a trend-line running higher off the March low. Further congestion could create an explosive breakout opportunity – we’ll discuss in further detail in future webinars.
USD/JPY Daily Chart (Wedging up)
Gold price expected to continue to weaken
Gold finally broke down from a triangle containing price between a pair of important boundaries – the bottom of a multi-month range and the December 2016 trend-line. Looking for weakness to sustain towards the December 2015 trend-line and December low. There is a lower parallel which may help put a temporary bid in, but given the trend direction it’s not anticipated to be a major source of support.
Gold Daily Chart (More weakness expected)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.