The fading expectations over the Federal Reserve raising US rates in Q2 amid the global uncertainties have provided a foundation for bearish investors to install another heavy round of selling into the Dollar Index. Sentiment remains heavily bearish towards the Dollar and with ongoing soft data from the States deteriorating investor attraction further, Dollar vulnerability could be the dominant theme in the global currency markets. From a technical standpoint, the Index has plummeted to fresh 9 month lows around 92.30 with the MACD buried deep into the downside. There have been consistently lower lows and lower high while prices are well below the daily 20 SMA. With bears conquering the 93.00 support, the gates have been opened for another dip towards 90.00.
The violent combination of Euro weakness and Yen appreciation has created a strikingly bearish trend on the EURJPY with prices religiously respecting a daily bearish channel. With Yen strength potentially becoming a recurrent theme in the markets, this pair remains under pressure and bears could exploit this weakness to installing another heavy round of selling. From a technical standpoint, prices are trading below both the 20 and 50 SMA while the MACD trades deep into the downside. Previous support around 123.00 could become a dynamic resistance that may invite an opportunity for sellers to send the EURJPY towards 121.50.
The EURGBP experienced a sharp surge to the upside during trading last week following a momentum of Sterling weakness that may have created a new higher low. This pair could turn bullish once again on the bullish timeframe if prices break above the 0.7900 resistance. From a technical standpoint, prices are trading below the daily 20 SMA while the MACD has also crossed to the downside. While the technical are in favor of the bears, the fundamentals could offer the bulls a moment of courage to take control once more with 0.7900 being the first steps.
Gold prices surged with force in the final trading days of April, following the explosive mixture of Dollar weakness and steep declines in equity markets that boosted investors’ appetite to safe have assets. This metal is fundamentally bullish and Dollar weakness continues to provide a platform for bullish investors to install a heavy round of buying momentum that has seen prices trade above $1300. With expectations rapidly diminishing over the Fed raising US rates in Q2 coupled with central bank caution, Gold could be a star performer for 2016. From a technical standpoint, prices are trading above the daily 20 SMA while the MACD has crossed to the upside. A breakout above $1300 could open a path towards $1330.
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