Gold Forex Technical Analysis for June 17, 2016
Gold markets broke out during the course of the session on Thursday, clearing the $1300 level which has been a very significant barrier. Because of this, I believe that the market is going to continue to go much higher, as it is a significant move. However, there is the possibility that we pullback from time to time and that of course could offer a bit of value. As the world’s currencies continue to be very volatile, Gold makes a lot of sense as it is not only an “anti-dollar” currency, but it also looks at other currencies around the world such as the Euro and the British pound. The British pound of course is very much in focus as the EU referendum is coming up. With that being the case, the market will be essentially “buy only” at this point in time as there is obviously a very massive amount of bullish pressure underneath, and with that it is one of my favorite markets to be involved in.
On top of that, we have a close towards the top of the range and that of course suggests that there will be plenty of momentum for the session today, but regardless there’s no way to actually sell this particular commodity at this point in time. The Federal Reserve has suggested that interest rates are going to stay low for very long time, and that of course should weaken the US dollar, which is the longer-term measuring stick of what should happen with gold. But with all of the quantitative easing around the world, gold is also going to rise against other currencies as well, it won’t just be the US dollar.
I believe that we have entered a longer-term uptrend, and as a result we should see more and more buyers into the market as it has become increasingly obvious the gold is going off over the longer term. Ultimately, the $1300 level should end up being a bit of a “floor” going forward, with a massive amount of support near the $1280 level as well.
In Other View Point – Gold Long
Looking for a start of a correction with new high posted to buy into, 1225-1250 area.
In Other View Point – USD/CAD headed back to 1.2900 as oil recovers
As oil recovery gained momentum, the USD/CAD pair failed to build on to its early rebound from 1.2900 level and reversed from 1.2945 region to currently trade around 1.2920 level.
On Thursday, the pair witnessed a volatile session, trimming majority of its sharp up-move to 1.3100 neighborhood to finally settle below 1.3000 psychological mark. Earlier on Thursday, the US Dollar continued strengthening as surprisingly strong Philly Fed Manufacturing index negated weak inflation and higher-than-expected weekly jobless claims data.
On Friday, broad US Dollar weakness accompanied by rebounding oil prices is seen extending support to the Canadian Dollar, dragging the USD/CAD pair lower.
Moving forward, investors now shift their focus to the Canadian May CPI number, which is expected to have risen 0.3% on monthly basis while the annual rate is expected to decline to 1.6% from 1.7%. Traders will also have the opportunity to evaluate the recovery trend in the US housing market from today’s releases of building permits and housing starts data.
Technical levels to watch
Weakness below 1.2900 round figure mark is likely to get extended towards 1.2850-45 horizontal support, which if broken is likely to expose 1.2800 handle ahead of 1.2765-60 support area. On the flip side, recovery momentum above 1.2960-70 is likely to assist the pair to surpass 1.3000 psychological mark and head towards 1.3030 resistance area. Any further up-move beyond 1.3030 resistance might continue to confront strong resistance around 1.3100 region.