technical outlook

Technical outlook: The US dollar index has hit the initial projected target at about 104.15 as seen on the 4H chart here. The Fibonacci 1.618 extension was exceeded as the bulls registered a high close to 104.23. The index reversed sharply from there, dragging the index lower through 103.00 before finding some near-term support. It is seen to be trading close to 103.70 at this point in writing.     The US dollar index seems to have more room on the upside to complete the rally, which had begun from the 100.34 lows. After witnessing a straight rally from 100.60 towards 104.23 levels, the price could consolidate ahead of 105.50 which looks like the next Fibonacci extension and target. Near-term support is seen just below 103.00.   The US dollar index should be targeting 105.50 and higher in the next few trading sessions. Please also note that 105.50 is the next price resistance and the bulls want to take that out to complete the larger-degree corrective pattern. After hitting 105.50, the US dollar index could begin a bearish reversal dragging the price much lower.   Trading idea: A potential rally through 105.50 remains possible in the near term.    

Technical outlook: EURUSD bounced off the 1.0640 lows last week and pushed higher towards 1.0779 on Friday as projected earlier. The bears were quick to take this opportunity and came back in control as the trajectory reversed towards 1.0700-10 to close the week. The single currency pair is seen to be trading close to 1.0700 at this point in writing as the bulls prepare to push towards 1.0760 at least in the near term.   EURUSD is unfolding an expanded flat corrective wave at a larger degree from the 1.1035 highs earlier.   The first wave lower terminated around 1.0520, while the second wave rallied through the 1.1095 highs before terminating. Since then, the last wave has been underway and is projected to terminate around 1.0500 in the next few trading sessions. EURUSD might have terminated a lower-degree corrective rally at 1.0779 on Friday or it could extend up to the 1.0820-30 area in the next 1-2 trading sessions.   The instrument could be trapped in a range for a few sessions before the bears are back in control to drag the price lower towards 1.0500. Watch out for intraday resistance around the 1.0820-30 zone.     Trading idea: A potential drop towards 1.0500 is possible in the near term.  

Technical outlook: EUR/USD has carved a fresh low at 1.0845 last week remaining just shy of initial support around 1.0830. The single currency pair has pulled back since then and is seen to be trading above 1.0880 at this point in writing. The bulls are likely to push prices towards the 1.1000-50 area before the next leg resumes lower. EUR/USD has broken its one-year trend line support as seen on the daily chart here. The probability remains for a push through the backside of the support-turned-resistance zone, which is seen around the 1.1000-50 zone before turning lower towards the 1.0500 Fibonacci target. Also, note that the entire rally between 0.9535 and 1.1275 could be retraced with prices reaching 1.0200. EUR/USD seems to have also carved a lower-degree downswing between 1.1275 and 1.0845 which could be retraced in the next few trading sessions. The Fibonacci 0.618 retracement is seen passing through 1.1150 which could be tested before the next leg resumes lower again. A push through 1.0920 will confirm that a corrective rally is underway.       Trading idea: A potential rally towards 1.1150 in the near term remains possible.  

The latest weekly gold survey shows Wall Street analysts are bearish for the current week, while sentiment among retail investors is roughly balanced. Analysts believe that the rise in U.S. bond yields, which reached a new 15-year high on Thursday, remains a significant restraining factor for gold.   The slowdown in China's economy also deters investors. According to Edward Moya, Senior Market analyst at OANDA, the yield on Treasury bonds is at a level that supports the Federal Reserve's monetary policy, and this is a difficult environment for gold. However, his opinion on gold prices for the current week is neutral, as he believes that bond yields are likely close to their peak, and gold sales dynamics are probably slowing down. For selling pressure on gold to persist, bond yields would need to continue rising. But most analysts believe a decline in gold prices is more likely.   Presumably, Federal Reserve Chairman Jerome Powell, speaking at the annual central bank meeting in Jackson Hole on Friday, will maintain his hawkish stance. And rates will remain high going forward. Last week, 16 Wall Street analysts participated in a gold survey. Among the participants, ten analysts, or 63%, were bearish for the current week. Two analysts, or 13%, were optimistic, while four analysts, or 25%, took a neutral stance. In online polls, 941 votes were cast. Of those, 415 respondents, or 44%, expect price increases. Another 386, or 41%, favor price decreases, while 140 voters, or 15%, voted for a neutral position.       Despite this, Adrian Day, president of Adrian Day Asset Management, is bullish on prices for the next few months. He believes that investors should not ignore short-term price dynamics, as it is rare to see such a drop without any continuation, adding that this week may see a decrease in prices, but this will not affect long-term growth. James Stanley, market strategist at Stone X, said even if Powell takes a neutral stance in Jackson Hole, gold will find it hard to change its bearish technical outlook. Likely, the technical support level will remain at $1875.  

Gold attempts to rebound following Friday's sharp drop The price of gold shows a renewed upward momentum at the start of the week as it attempts to rebound from the drop seen on friday which brought the price down nearly 1.50% after the Federal Reserve's recent signaling of the conclusion of its monetary policy tightening cycle and the suggestion of a cumulative 75 basis points rate reduction in 2024 led to a sharp upward move last Wednesday. Additionally, heightened geopolitical risks and concerns surrounding a more pronounced economic downturn, particularly in China and the Eurozone along with general economic uncertainty, provide added support to gold as a safe-haven asset. From a technical point of view, any subsequent upward movement is likely to encounter resistance in the vicinity of the $2,040 range and a breach beyond this level could prompt a test of last week's peak, around the $2,049-2,050 region. On the other hand, a downside correction may find support in the $2,015-2,010 area before approaching the psychological threshold of $2,000 and which may be followed by the $1,980 area from which last wednesday's post-FOMC upward move started.