The Dollar continues to have an increasingly bearish look to its short-term chart, at risk of falling further back inside the long-term wedge. The Euro is pointed higher but may not get too far before running into trouble again. The Australian Dollar is showing weak price action around a critical level, but still looking for separation so it can pick up momentum. Gold has fairly defined levels to watch in the week ahead while it continues to build a range.
Technical Highlights:
- The US Dollar Index (DXY) looks ready to slip further
- Euro to rally, but has resistance not too far ahead
- AUDUSD weakening around the key 7000-level
- Gold price ranging with defined levels, bias is lower
See where our team of analysts see your favorite markets and currencies headed in the in the DailyFX Trading Forecasts.
The US Dollar Index (DXY) looks ready to slip further
The US Dollar Index (DXY) has been trading below the breakout point of the ascending wedge, however; the powerful May 1 reversal kept the outlook constructive. Since then, though, we’ve seen price action deteriorate and with a descending wedge pattern start taking shape on the 4-hr time-frame. This points to further weakness in the sessions ahead, with the 96.80 area targeted (prior swing low/trend-line). A break above 97.74 will start negating this bearish outlook and bring in the possibility of a rally.
US Dollar Index (DXY) Daily Chart (inside broader wedge)
DXY 4-hr Chart (Descending wedge forming)
Find out where our analysts see the Dollar heading in the coming weeks based on both fundamental and technical factors – Q2 Dollar Forecast
Euro to rally, but has resistance not too far ahead
The Euro is the primary driver of the DXY, and on that it is set up to work its way higher. The issue to take up with the Euro is the low volatility and close proximity of important levels. A pair of trend-lines from January and September of last year are falling down on price about 60-90 points from here. Upward bias but limited room to work with.
EURUSD Daily Chart (watch t-line resistance on strength)
Find out where our analysts see the Euro heading in the coming weeks based on both fundamental and technical factors – Q2 Euro Forecast
AUDUSD weakening around the key 7000-level
AUDUSD is flirting with breaking away from the descending wedge and falling below the critical 7000 level. Recent price action has been weak and suggests more weakness could be ahead shortly. A move below 6964 will strengthen this view.
AUDUSD Daily Chart (weak price action around 7000)
Gold price ranging with defined levels, bias is lower
As discussed in yesterday’s gold price and silver outlook gold looks headed lower as resistance and trend are unfavorable for it. The defined levels to watch are 1292 on the top-side for a breakout towards 1310 and 1266 for an extended move lower. More range is likely in the days ahead but at some point a tradeable move will develop.
Find out where our analysts see Gold heading in the coming weeks based on both fundamental and technical factors – Q2 Gold Forecast
Gold Price Daily Chart (levels to watch on both sides)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
