A Bearish Reversal On The Horizon For Gold?

• 8 Sep 2020

USD/JPY

The USD/JPY pair has flattened out in the 106.05- 107.94 price range, as small-bodied candles indicate a lack of conviction to drive price action. Generally, this series of candles come before a breakout/trend change. However, with both currencies remaining weak, a change in fundamentals will be required to drive a change. Momentum indicators have stalled in neutral territory.  

 

 

 

 

 

EUR/USD

The Eurodollar appears set to drift within the 1.172-1.192 range as sellers appetite has waned after the break. The most likely next test will be the 1.172 support level. Current price action reflects a break in the longer-term rally. Momentum indicators have downward trajectories.

 

 

 

 

 

GBP/USD

GBP/USD sellers have returned with conviction breaking another support level to now test the 1.311 price line. A break would be significant and likely take price action back towards the ascending trendline. Whether sellers can sustain the move will be determined in the next few trading sessions. Momentum indicators have begun sharp downward trajectories.

 

 

 

 

 

USD/CHF

The USD/CHF pair is fast approaching the descending trendline, as bullish momentum gathers strength. A break would be a confirmation of the reversal and likely see the pair heading towards the 0.925 resistance line. Momentum indicators have sharp upward trajectories. 

 

 

 

 

 

USD/CAD

USD/CAD buyers are attempting a reversal at the 1.295 price level, with the 1.322 resistance line in sight. There appears scant conviction to really drive the rally and the longer-term downtrend currently remains intact. Momentum indicators have begun upward trajectories. 

 

 

 

 

 

GOLD

Gold has begun to oscillate horizontally as the metal enters a period of exhaustion after a protracted rally. A rebound generally takes place at the trendline yet currently there is little conviction from buyers. A breakout may be imminent given the small-bodied candles that are forming around the trendline. Momentum indicators have turned bearish. 

 

 

 

 

 

OIL

The WTI sell-off has stalled after the break settling at the $39 per barrel price level and remaining in the $30 per barrel range which is largely unprofitable for oil producers. If price action remains at current levels we may see further supply cuts. Momentum indicators have bearish trajectories with RSI testing the 30 support level.