The U.S. Dollar Index (DXY) has been grinding its way lower back inside a long-term pattern, but despite it failing to hold prior breakout levels the price action suggests it will reassert itself to the upside soon. The Euro has plenty of technical headwinds to contend with. AUDUSD breakdown below 7000 holds the key to lower prices. Gold sprinted higher yesterday, may trade higher in sessions ahead.
- Dollar price action is corrective-looking
- Euro trend and resistance in the way, AUD below 7000
- Gold price broke confluent resistance, may want to go higher
Fresh Q2 Forecasts are out for major markets and currencies. Check them out on the DailyFX Trading Guides page.
Dollar price action is corrective-looking
The US Dollar Index (DXY) has been trading off but not in a meaningfully bearish way. Since failing to hold the breakout from last month in a meaningful way there have been a couple of bullish reversal days amongst a general grind lower, which smacks as corrective in behavior. A falling wedge is starting to come into view and whether it ends from a trend-line rising up from February of last year or sooner, a bullish move looks set to unfold soon.
US Dollar Index (DXY) Daily Chart (corrective-looking price action, wedging)
Euro trend and resistance in the way, AUD below 7000
The Euro is the primary driver for the USD index and is naturally taking an inverted path. One more little push higher may develop, but two trend-lines from 2018 are coming down around the same price region and should act as a formidable ceiling given the overall persistent downward trend in place since the beginning of 2018. In any event, the Euro won’t be able to gain any downside traction until it breaks the rising trend-line most visible on the 4-hr time-frame. Stay above and the near-term outlook is neutral to bullish.
EURUSD Daily Chart (trend, resistance working against it soon)
Euro 4-hr Chart (watch underside t-line)
AUDUSD broke the 7000 level and for as long as it stays below a bearish trading bias will remain intact. A deeper dive towards the flash-crash low is anticipated in the days/weeks ahead.
AUDUSD Daily Chart (below the 7000 level)
Gold price broke confluent resistance, may want to go higher
Gold price broke higher yesterday with force, taking out a confluent area of resistance made of up a pair of trend-lines. The breakout has price momentum in favor of higher prices, with 1308/1310 up next as resistance.
Gold Price Chart (broke strongly above resistance)
Find out where our analysts see gold heading in the coming weeks based on both fundamental and technical factors – Q2 Gold Forecast
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX