Market Update: AUDUSD and Gold Technical Outlooks

Hi, and welcome to today’s technical outlook. We are focusing on AUDUSD and Gold as both markets look to be forming a similar pattern. The USD today has u-turned after a solid recovery on Monday. While risk markets are performing well to the USD, they remain mixed with the JPY at this stage.

The USD index, while lower, looks to have plenty of demand from 105.70. We feel this level needs to be broken to really suggest that the market is looking to extend lower.

AUDUSD

What a turnaround we are seeing today after yesterday’s sell-off. Basically, a mirror image after sellers knocked 1.06% off after the morning’s gap lower. Today buyers have added 1.21%, eclipsing all of yesterday’s losses.

Bullish engulfing? Yep, it looks that way at the moment, and support looks firm at .6645. Yesterday’s low has also set up a new higher low. Yes, today’s price action is bullish, but buyers still have .6770 resistance to beat, and that area has held firm since mid-month. We could also be seeing an ascending triangle pattern forming, so if we see the price continue to consolidate after test .6770, this could confirm that pattern idea.

Gold

Like the AUD, we have seen a solid recovery after heavy selling yesterday. This is why I have grouped them together in today’s report, as the price action since Monday has been quite similar. Price continues to hold in its new breakout, but buyers have been having a hard time so far taking that next step in forming a new continuation.

The two levels we are watching today are 1737.40 support and 1756 resistance. Both of these levels are short-term, and we still think the real test for buyers is up at 1780.50. Price, for now, continues to consolidate between those two levels, and we are looking for a key move that breaks the deadlock. We are still leaning toward an upwards break to maintain the current up leg but a break below support is a warning sign.

Depending on what happens from now until Friday, we still feel that Friday’s US employment data could be the influence that has the highest probability to break some of the stalemates. The data will be released Saturday morning at 12:30 pm AEDT.

All times are AEST.

  * The information provided here has been prepared by Eightcap’s team of analysts. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and do not reflect the opinions of Eightcap.

In addition to the disclaimer on Eightcap's website, the material on this page does not contain a record of our trading prices, or represent an offer or solicitation for a transaction in any financial instrument. Eightcap accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.

Please note that past performance is not a guarantee or prediction of future performance. This communication must not be reproduced or further distributed without prior permission.