Technical Outlook for the USD Index, GBP/USD, Dow Jones, Gold Price & More
The price sequence in the US Dollar Index (DXY) is on a collision course with time as price funnels towards the beginning of 2019. GBP/USD broke support last week and is having a difficult time getting back above. The Dow Jones sell-off yesterday took it down into big support from earlier this year, can it rebound or at least put in a floor for the remainder of the month? Gold is trying to stay constructive in a bullish channel and make another leg higher.
- US Dollar Index (DXY) inching towards an ‘explosion point’
- GBP/USD remains capped by prior support now resistance
- Dow Jones will look to try and hold earlier-year support
- Gold price channeling higher within bullish channel
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US Dollar Index (DXY) inching towards an ‘explosion point’
The US Dollar Index (DXY) continues to be very sloppy as it works towards the intersection of a pair of trend-lines extending from late last year and earlier this year. The choppy, funneling price action hasn’t been too friendly to traders lately unless fading quick moves, but with January, an often-explosive month, just around the bend we could see sizable breakout. So, hang tight, get through the holidays and we might find ourselves finally having a Dollar trend to trade.
US Dollar Index (DXY) Daily Chart (Inching towards big breakout)
GBP/USD remains capped by prior support now resistance
GBP/USD broke support last Monday, and since then it has held steady beneath it making it solid resistance. With all that surrounds Cable on the headline-front it’s not the most attractive pair to trade, but as long as it stays below resistance look for pressure to stay on.
GBP/USD Daily Chart (Capped by former support)
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Dow Jones will look to try and hold earlier-year support
The sell-off yesterday pushed U.S. indices into early-year lows, and on that we might see a rebound. Some will call it a Santa Clause rally if the market bounces, but if that is the case it won’t be much more than just repairing some recent damage.
A bounce from around current levels won’t take long to have the Dow trading back into a thicket of levels and lines. We may see price action turn somewhat rangebound as this week marks the last full week of market participation before thinning out into Christmas and New Year’s.
Dow Jones Daily Chart (trading at significant support)
Gold price channeling higher within bullish channel
Gold is dragging itself higher, so it feels, as volatility for the precious metal remains low. The channel off the November bottom is straightforward and so long as gold stays in it then higher prices look to be in order. The 200-day arrives not far from here at 1253, followed by the top of the channel and the upper parallel of what could become a broader bear-flag pattern.
Gold Daily Chart (Channeling higher)
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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.