Gold markets rallied significantly during the week, breaking above the $1350 level, an area that has been resistance in the past. There is a bit of noise just above, and at this point I think we are trying to do is build some type of basing pattern for a longer-term move.
On Friday price failed to break the previous high and ended the week off with a bearish engulfing pattern. For the short term I am looking for a short position to the trendline which is based on a technical basis.
USDJPY’s overall momentum is descending in which the structures current momentum is also descending. Within USDJPY most recent price action, it failed to gain any bullish momentum and continued to push to the downside. USDJPY did however close just above our channel level and printed a bullish hammer on Friday signalling a positive start to the week. News data out this week could push price action back up to resistance.
USDCAD’s overall momentum is descending and current momentum is ascending. USDCAD is currently trading within a bullish flag on the daily time frame. Price is currently heading towards 1.262 level where it will be met with some resistance on the channel trend line. A break out of the channel to the upside would warrant the long position, however rejection of the channel trend line could mean another push lower.
GBPUSD is currently ascending and trading in a bullish flag formation. However we have seen the GBP come under huge pressure of the past couple weeks and further downside is expected. Last week on the final rally GBPUSD failed to break out of the channel and has retreated since then. Further downside to the channel support is expected.
GBPJPY overall momentum is ascending and current momentum is descending. Price has been created lower lows and lower highs for the week and this week I expect further downside. Next major support is the 146.800 level which if it hits will break the daily trend line signalling further bearish action.