Gold is working on posting a new swing-high during its multi-month rally, bringing a long-term resistance zone into focus. It could get there relatively soon. USDCAD bounced off long-term trend support late last month and is now working on building a bullish pattern to continue higher from. AUDUSD looks similar to USDCAD, only upside down – weakness expected after a weak attempt to rally.
- Gold is putting together a breakout; 1350/60 zone could be next
- USDCAD working on a right shoulder triangle
- AUDUSD weak bounce looks poised to lead to more selling
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Gold is putting together a breakout; 1350/60 zone could be next
Gold is working on a new swing-high (>1326) in the sequence off the summer low. If it can maintain a bid there isn’t much to prevent gold from rallying to 1350/60 soon. It would be a major test at that juncture with the top of a developing long-term wedge arriving where gold put in several peaks in the 1350/60-area.
The trend is your friend, as they say, running with a bullish bias until either resistance is met or a sharp break lower undermines the current trend structure and support.
Gold Daily Chart (room to run)
Check out the Q1 Gold Forecast to see our analysts’ intermediate-term fundamental and technical outlook.
USDCAD working on a right shoulder triangle
Priming this set-up is the fact that USDCAD bounced off a trend-line going back a little over a year. The price sequence around that trend-line is taking on the shape of an inverse head-and-shoulders, with the right shoulder working on a triangle. If the bullish set-up is to work out, a breakout is likely to unfold this week. This could lead to a fairly substantial rally given the long-term trend and broadness of the bottoming formation. A strong breakdown below 13200 will negate the forming pattern and bring long-term support back into play.
USDCAD 4-hr Chart (right shoulder triangle developing)
Check out the Q1 USD Forecast to see our analysts’ intermediate-term fundamental and technical outlook.
AUDUSD weak bounce looks poised to lead to more selling
AUDUSD has over an 80% inverse correlation to USDCAD and with it is also taking on similar form, just upside down. The weak bounce in AUD is bringing with it the likelihood of seeing more selling come in soon. On the 4-hr chart, a bear-flag is forming. A break below the lower parallel should have Aussie rolling downhill.
AUDUSD 4-hr Chart (bear-flag)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX