Although markets continue to drift rather benignly, there is a gradual rebound in the dollar that continues to impact on forex pairs today. European indices remain under pressure. Gold and silver are making gains again.
EUR/USD has formed rolling top and today continues to drift back towards the $1.3775/$1.3825 support band. This is not a major correction, so far today the trading band is just 41 pips but more of a gradual drift. There is no major US data released today so this increases the potential for a trending day. The current trend is lower.
GBP/USD has spiked around in early European trading, with an early sell-off then finding support with positive UK Manufacturing Production data. The chart still looks open for a retreat back towards $1.6603, but this is a key support area and with the support currently intact the outlook is a difficult call.
USDJPY is now increasingly consolidating following the strength over the past 7 days. Holding up on the 55 day moving average is a positive, but the immediate upside is running out of steam. 102.83 has been tested for the past two days and this could easily be seen again. For now I would look upon dips as opportunities to buy (whilst this support around 102.83 remains intact).
Gold remains strong after the early gains today. As I said in the Morning Report video, using the RSI in a ranging period can be a successful trading tool. Hourly RSI is now 70.6 and this means it is in the territory needed for a crossover sell signal. I would continue to play the range and use this strength as a chance to sell. Wait for the hourly RSI to cross back below 70 as a potential signal.
The DAX remains under pressure having broken last Monday’s low a 9359. I am looking for a rally as a chance to sell now. There is a band of resistance 9359/9437 that can be used as a potential sell-zone.
The FTSE 100 is following the DAX lower and has just breached its equivalent low from last Monday at 6672. I would be looking to use any oversold intraday rally as a chance to sell. The sell-zone for the FTSE is at 6672/6715.