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The generally quiet month continues as the quarter draws towards its conclusion. Perhaps the Fed can pop it free for movement, but then again, perhaps not. The euro broke out last week and is sitting above support, can it make good on the breakout through the rest of the week? USD/JPY is trading higher in a neatly formed channel, traders can use it as a short-term guide. Gold remains in a historically tight range, avoiding until it can break free.

Technical Highlights:

  • EUR/USD trying to hold onto breakout levels
  • USD/JPY has a tight channel traders can use as guidance
  • Gold price remains stuck in historically tight range

See how sentiment can factor into helping with making trading decisions via the IG Client Sentiment page.

EUR/USD trying to hold onto breakout levels

On Friday, the euro finally broke out above levels in the mid-11700s which had kept on a lid on price several prior occasions. The breakout was solid but price action since hasn’t led to more follow-through. The old levels of resistance are acting as support so far, and as long as that remains the case then look for higher prices to unfold despite Monday’s semi-bearish turnabout. Looking to 11852 as next up as resistance on further strength. If price sinks back below 11700, then more choppy trading could be in store and to the sidelines we’ll head.

EUR/USD 4-hr Chart (Trying to hold on to breakout)

EUR/USD daily chart, supported

To see what’s been driving the Euro, check out the Quarterly Report

USD/JPY has a tight channel traders can use as guidance

USD/JPY continues to forge on higher in grinding fashion, which has resulted in a very steady channel. But as price rises towards the July high the channel could come under fire. Should the underside parallel break it doesn’t necessarily mean USD/JPY will reverse lower, but it will weaken the current trend structure. Longs can use it to as a means of assessing risk while would-be shorts can look to a channel break as increasing the odds of seeing weakness set in.

USD/JPY 4-hr Chart (Channel guidance)

USD/JPY 4-hr chart, channel guidance

Gold price remains stuck in historically tight range

The brutally (and historically) tight range in gold persists and persists. It feels like gold won’t ever move again, but this is just when attention should start to perk up as these situations often lead to volatile price movement. If the monthly high (1212) or low (1187) aren’t broken by the close on Friday, this month’s range will rank as the smallest in over 22 years. That almost certainly won’t last another month.

Gold Daily Chart (Waiting for range-break)

Gold daily chart, waiting for range-break

To find out what’s been driving gold, check out the Quarterly Gold Report

Resources for Index & Commodity Traders

Whether you are a new or an experienced trader, DailyFX has several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX