XAU/USD – How far will Gold reach before the upcoming reversal?
Our preference: below 1464 with targets at 1456 & 1451 in extension.
Alternative scenario: above 1464 look for further upside with 1474 & 1483 as targets.
How Far Will Gold Reach Before the Upcoming Reversal?
ANALYSIS | Published Dec 03, 2019 05:40 (+00:00)
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Just when most traders thought that the previous week is going to end in the red for gold,
something exceptional happened.
The USD Index reversed after rallying, and gold rallied sharply in response. In the end,
gold ended the week in the green by forming a clear weekly reversal.
That was actually the second weekly reversal that we saw recently.
Why is this important? Because of what happened shortly after we saw the opposite of it not so long ago.
EUR/GBP is not ruled out in the very near term – Commerzbank
Our preference: above 0.8521 with targets at 0.8543 & 0.8558 in extension.
Alternative scenario: below 0.8521 look for further upside with 0.8511 & 0.8502 as targets.
Following the recent price action, EUR/GBP could attempt a bounce in the next days, according to Karen Jones,
Team Head FICC Technical Analysis Research at Commerzbank.
“The market came under pressure last week, however given that the market has again seen divergence of the daily RSI,
we suspect we will see only a very slow grind lower at best and may in fact see a bounce higher this week.
EUR/GBP remains stuck below last week’s high at .8606 and has now eroded last week’s low at .8522.
Below here lies the May low at .8465. We note the TD support at .8440 and we look for the market to hold here”.
“Above last week’s high at .8606 lies a minor downtrend channel resistance line at .8622
ahead of the four month downtrend line at .8760. Overhead resistance is reinforced by .8786 the mid-September low”.
EUR/USD EMAs Show Expanding Momentum on Daily
Our preference: short positions below 1.0999 with targets at 1.0941 & 1.0975 in extension.Alternative scenario: above 1.0999 look for further upside with 1.1064 & 1.1092 as targets.
The below is the daily chart of EURUSD. The currency pair’s EMAs are in a bearish stack (aqua ellipse). I.e. the green 5-day EMA is below the orange 13-day EMA, and the orange 13-day EMA is below the black 34-day EMA.
Moreover, the EMAs are starting to angle and separate. This is a characteristic of expanding momentum. Simarlarly, we note that the RSI is on the bearish side of 50 (blue rectangle). As long as the chart indicators maintain these positions the likely trajectory for the currency is down.
USD/CAD struggles near 1-week lows, bears await a break below 1.3200 mark
Our preference: short positions below 1.3215 with targets at 1.3190 & 1.3175 in extension.Alternative scenario: above 1.3215 look for further upside with 1.3235 & 1.3250 as targets
The USD remained depressed amid renewed US-China trade uncertainty.
Weaker oil prices undermined the loonie and helped limit the downside.
The USD/CAD pair was seen oscillating in a narrow trading band through the early European session on Tuesday, with bears awaiting a sustained break below the 1.3200 handle.
The pair lacked any firm directional bias on Tuesday and consolidated the recent sharp pullback from one-month tops. A combination of diverging forces failed to provide any meaningful impetus and lead to a subdued/range-bound price action.
Weaker oil prices offset trade uncertainty
The US dollar remained depressed amid receding hopes for a preliminary US-China trade deal. In the latest trade-related development, CNBC reported on Monday that Chinese officials are pessimistic that a trade deal will be signed with the United States.
The report, which cited government sources,
said the bleak outlook was due to the US President Donald Trump’s reluctance to roll back tariffs and weighed on the USD, albeit a modest uptick in the US Treasury bond yields helped limit the downside.
Meanwhile, oil prices fell for the second straight day on Tuesday amid fresh US-China trade jitter and expectations of a rise in the US inventories, which undermined the commodity-linked currency – loonie and extended some support to the major.
Moving ahead, market participants now look forward to the US economic docket, featuring the release of housing market data, which coupled with speeches by influential FOMC member might produce some meaningful trading opportunities later this Tuesday.
AUD/USD rebounds from 2-week low, lacks follow-through
Our preference: short positions below 0.6850 with targets at 0.6825 & 0.6810 in extension.Alternative scenario: above 0.6850 look for further upside with 0.6865 & 0.6875 as targets.
Slightly better Aussie data helped gain some positive traction.
The risk-off mood/US-China trade uncertainty capping gains.
The US CPI and Powell’s testimony eyed for a fresh impetus.
The AUD/USD pair staged a modest rebound from over two-week lows,
albeit seemed struggling to extend the momentum further beyond mid-0.6800s.
The pair stalled its recent pullback and managed to find some support near
the 0.6830 in reaction to a strong rebound in the Westpac Consumer Confidence Index, which rose to +4.5% in November as compared to -5.5% recorded in the previous month.
USD/CAD technical analysis: 50-day EMA, 1.3220/25 exert downside pressure
Our preference: long positions above 1.3135 with targets at 1.3175 & 1.3195 in extension.Alternative scenario: below 1.3135 look for further downside with 1.3120 & 1.3105 as targets.
USD/CAD bounces off 23.6% Fibonacci retracement of May-July downpour.
1.3100 holds the key to October lows, 1.3000 round-figure.
The USD/CAD pair’s recent pullback from 23.6% Fibonacci retracement falls short to conquer 50-day EMA and near-term key resistance-confluence. The quote seesaws around 1.3160 during Wednesday’s Asian session.
Should prices follow static conditions of 14-bar Relative Strength Index (RSI) and extends recovery, 50-day Exponential Moving Average (EMA) level of 1.3193 seems to be the key for intra-day buyers,
a break of which could push them to confront 1.3220/25 region including 100-day EMA and 38.2% Fibonacci retracement.
GBP/USD technical analysis: Pivots around 200-hour EMA, moves little post-UK PMI Our preference: long positions above 1.2875 with targets at 1.2920 & 1.2940 in extension.Alternative scenario: below 1.2875 look for further downside with 1.2860 & 1.2845 as targets.
Bulls struggled to capitalize on the early uptick to levels just above 1.2900 handle.The downside remains cushioned following the release of upbeat UK services PMI.
The GBP/USD pair struggled to capitalize on its intraday uptick to levels just above the 1.2900 handle and refreshed session lows in the last hour.
Bulls showed some resilience at lower levels following the release of stronger UK services PMI for October, albeit lacked any strong conviction.
The pair has been pivoting around 200-hour SMA since the US session on Monday and thus, warrant some caution before placing any aggressive bets.
Meanwhile, technical indicators on hourly charts have just started gaining negative momentum and support prospects for further depreciating move.
However, oscillators on the daily chart maintained their bullish bias and seemed to largely offset the bearish outlook, rather attract some dip-buying interest.
The neutral set-up hasn’t been supportive of any firm direction,
making it prudent to wait for a sustained move in either direction before placing fresh directional bets.
NZD/USD keeps the upside bias, now targets 0.6500 – UOB
Our preference: under pressure below 0.6459.
Alternative scenario: above 0.6459, look for 0.6479 and 0.6491.
NZD/USD could attempt a move to the 0.6480/0.6500 area in the next weeks, suggested FX Strategists at UOB Group.
24-hour view: “We highlighted last Friday, “barring a move below 0.6390,
NZD could advance further even though the major 0.6450 level is likely out of reach for today”.
NZD subsequently dipped to 0.6404 before surging briefly above 0.6450 (high of 0.6456).
The advance is running ahead of itself and further sustained NZD strength is not expected for today.
NZD is more likely to consolidate its gains and trade sideways at these higher levels,
expected to- be within a 0.6410/0.6450 range”.
Next 1-3 weeks: “We highlighted last Friday (01 Nov, spot at 0.6410) that “the odds for a break of the September’s peak of 0.6450 have increased”. NZD subsequently rose to 0.6456 before retreating quickly.
While overbought shorter-term conditions could lead to 1 to 2 days of consolidation first, the outlook for NZD is still positive and a test of the strong 0.6480/0.6500 resistance would not be surprising.
On the downside, only a break of 0.6390 (‘strong support’ level was at 0.6370) would suggest our view is wrong”
GBP/USD Forecast: Halloween Party set to continue thanks to the Fed and Farage Our preference: long positions above 1.2935 with targets at 1.2985 & 1.3005 in extension.Alternative scenario: below 1.2935 look for further downside with 1.2895 & 1.2870 as targets.
GBP/USD has been extending its gains after the Fed’s decision.
Speculation about the UK elections is set to determine the next moves.
Thursday’s technical chart is pointing to further gains.
Trick or treat? Brexiteers may feel tricked on Halloween – which was supposed to be Brexit Day – the third one. GBP/USD is on the rise, but the main driver is the US Federal Reserve rather than any UK event.
The Fed cut interest rates for the third time as expected and signaled a pause.
The US Dollar advanced at first, but then changed course and fell,
as Chair Jerome Powell indicated that the bar for raising rates is high.
The bank would like to see a significant rise in inflation before hiking,
while the threshold for cutting again seems lower.
EUR/USD Further upside in lost traction – UOB
Our preference: short positions below 1.1132 with targets at 1.1107 & 1.1097 in extension.Alternative scenario: above 1.1132 look for further upside with 1.1142 & 1.1157 as targets.
FX Strategists at UOB Group noted the bullish outlook on EUR/USD appears to have lost some momentum
despite a test of 1.1180 still remains on the cards.
24-hour view: “EUR traded in a relatively narrow range between 1.1074 and 1.1107 before ending the day slightly higher at 1.1098 (+0.18%). The quiet price action offers no fresh clues and EUR could continue to trade sideways for today, likely between 1.1080 and 1.1125”.
Next 1-3 weeks: “EUR dipped to 1.1071 on Friday (25 Oct),
just one pip above our ‘strong support’ indicated in our last update on 23 Oct (spot at 1.1130). The prospect for further EUR strength has clearly diminished but there is still a slim chance that EUR could muster one more push high towards last week’s top near 1.1180. However, a break of 1.1070 would suggest EUR could trade sideways for a period”.