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Analysis

Gold reverses as yields support the dollar

Gold chart 11 21

US yields have been rising after some hawkish Fedtalk last week. This has pressured yield-sensitive gold which now breaks supports. I warned last week that the upside in gold was limited and that the market could be reversing it’s recent uptrend. This is exactly what the rising yields have now done.

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Gold broke the 1753 support level and has now reversed the recent uptrend. I gave you a heads up about the weakness visible in gold here and here so I really hope you made some money from the weakness that followed. Below 1753 I’m looking for short trade signals with my target at T1 1726 and T2 at 1717. Above 1753 I expect the market to move to test the 1767 level again.

EURUSD chart 11 21

EURUSD

EURUSD is creating a topping formation after the weakness I talked about here. The market has created lower highs and is now breaking below a key support level at 1.0280. I’m looking for sell signals below 1.0305 with my target at 1.0171. If the market attracts buyers above 1.0305 I expect EURUSD to move to 1.0380 or so.

USDCAD chart 11 21

USDCAD

USDCAD bounced nicely from the channel high (1.3305) after the return move and is now trying to push above the 1.3412 level I mentioned here. I’m looking for long signals in this market above 1.3370 with my target at the 1.3510 – 1.3520 range.  Below 1.3370 USDCAD probably moves to 1.3350 (the bull channel low).

USOIL chart 11 21 1

USOIL

USOIL has now retraced almost to the September low (76.06). In the process, USOIL hit my downside target of 78.50 (see here). Let’s take a look at the long-term technical picture in USOIL. The market has been ranging inside a wide range formation (between 76.06 – 92.61). It’s impossible to know which way the sideways move is resolved but it doesn’t matter. We can just trade the price action and trade either long or short as we see price action confirming either a bullish or bearish breakout. But as long as we are inside the range we should be buyers at or near support and sellers at or near resistance.  

GBPUSD chart 11 21

GBPUSD

GBPUSD broke out of the sideways range hit my downside target of 1.1827. This price action happens inside a bigger price formation. The 8h chart shows a triangle formation that can give us swing trade targets. If the triangle is resolved to the upside my target is at 1.2150. If the breakout happens to the downside I expect the market to trade down to the 1.1600 – 1.1620 range.

 The Next Main Risk Events

  • AUD RBA Gov Lowe Speaks
  • CAD Core Retail Sales m/m
  • CAD Retail Sales m/m
  • USD Richmond Manufacturing Index
  • USD FOMC Member Mester Speaks
  • USD FOMC Member George Speaks
  • USD FOMC Member Bullard Speaks

For more information and details see the TIOmarkets economic calendar here

Trade Safe!

Janne Muta
Chief Market Analyst
TIOmarkets.com

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