Gold Prices – Long Term Contraction Continues

gold prices squeeze inside triangle pattern

Gold prices have been in a contracting bullish range since the pivot low formed in December 2015. The monthly chart below suggests the pivot low was an Elliott Wave 4 pullback. The lower trend line going back some 10 years has been respected during this recent contraction period.

Gold has had difficulty overcoming $1370 despite the recent strength with equities. Therefore, a strong level of resistance at the horizontal line can be viewed on the monthly chart below.

It is possible to view an ascending triangle chart pattern forming over the last few years with that horizontal resistance level and the rising trendline. Typically, the price breaks out in the same direction as the trend that was in place just prior to the triangle forming. In this case, we could say that the wave 4 low could be tested again.

This assumption is not always the case and I am looking at equity indices making new highs but not with heavy volume. This combined with inflation worries in the United States coupled with the Fed likely to raise interest rates in June, could be a catalyst for a bearish correction in the stock markets.

If this happens, gold prices may react positively as investors seek to reduce stock holdings and invest in gold for safety. This could be the catalyst for XAUUSD to finally break through $1370 with enough momentum towards our 5th wave target at $2150 (blue zone on chart below). This is backed up with the divergence being shown on our Elliott Wave Oscillator over this longer-term period as can be seen on the monthly chart below.

(Understand a little more how the MT4 Elliott Wave Indicator Suite works here)

gold price analysis using longer term trends.

you might be interested in…

Trading the gold-silver ratio

US Dollar Rejected at Weekly High After NFP: S&P 500 Nearing a Turn?

US Dollar Talking Points:

– The US Dollar is heading lower this morning following the release of April Non-Farm Payroll numbers out of the United States. The headline print came out strong, showing at +263k versus an expectation of +190k. But, elsewhere in the report, the internals weren’t as positive and the net response thus far has been a move of USD weakness.

– The initial move in USD was a quick wick up to test the weekly high; but sellers showed soon after and have retained control since. The rest of today brings a series of FOMC speakers, and this could continue to drive volatility through markets following this week’s rate decision, and next week brings the release of US CPI numbers on Friday.

– DailyFX Forecasts are published on a variety of currencies such as the US Dollar or the Euroand are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

Do you want to see how retail traders are currently trading the US Dollar? Check out our IG Client Sentiment Indicator.

US Dollar Drops After NFP

This morning brought the release of April Non-Farm Payroll numbers out of the US, and while the headline number was fairly strong, the internals were questionable. The US economy added +263k jobs in the month of April, blowing by the expectation for +190k to have been added. Also in the positive column was the unemployment rate, which sunk to a fresh 50-year low, printing at 3.6% versus the expectation of 3.8%. But – the question marks around inflation in the US economy remain as Average Hourly Earnings missed expectations, coming in at an annualized 3.2% versus the expectation for 3.3%; and labor force participation also slowed, helping to buffer that attractive showing in the unemployment rate.

At this point, the net response in the US Dollar has been one of weakness. After an initial flare of strength after the release of the headline number, at which point prices in DXY pushed-up to test the weekly high at 98.10, bears have come back to re-take control of the matter.

US Dollar 30-Minute Price Chart: Rejected at the Weekly High

us dollar usd price chart 30 minute

The remainder of today will be filled with Fed-Speak: At 10:15 AM ET, we hear from Evans and that’s followed by Mr. Richard Clarida at 11:30 AM. John Williams of the NY Fed speaks at 1:45, and Bowman offers comments at 3:00 PM. Later tonight at 7:45 PM ET, after markets have closed, we will hear from all of Bullard, Daly, Kaplan and Loretta Mester.

Given this week’s response around FOMC, and that color commentary could offer some much needed clarity. Price action in the aftermath of this week’s Fed rate decision has been rather messy. There have been a few clear themes, such as USD-strength, but in major risk areas such as US equities, more questions remains.

In the US Dollar, the big question is whether bulls can continue to drive. The initial response around FOMC was a quick stop run through the weekly low, but that was followed by a pronounced bullish response that saw USD move right back towards prior highs. That theme lasted all the way into this morning’s NFP which, at this point, appears to be a mere pullback in that bullish trend.

US Dollar Daily Price Chart

us dollar usd daily price chart

US Equities: Is a Turn Nearing?

Perhaps the bigger question at the moment considering this week’s moves is whether or not US equities may be nearing a turn. Stocks put in a pronounced bearish response after the Wednesday Fed meeting, and that theme of weakness lasted through the open yesterday. From a technical perspective, the S&P 500 tested below a bullish trend-line that makes up the support side of a rising wedge pattern, and this is a formation that will often be approached with the aim of bearish reversals.

S&P 500 Four-Hour Price Chart

spx 500 four hour price chart

The fact that this move appeared to emanate from a Federal Reserve that didn’t come out as dovish as many had expected, and there could be considerable interest around reversal backdrops as we move deeper into Q2.

The risk trade folded in Q4, and the big driver there appeared to be some comments from FOMC Chair, Jerome Powell, alluding to a series of future rate hikes out of the Fed. This took place in the opening days of Q4, and shortly after stocks had started to turn-lower with a full head of steam. That theme lasted throughout the final quarter of last year, with lows coming in around the Christmas holiday. And Q1 of this year saw a considerably more passive FOMC that did away with rate hike expectations for this year; and quickly – stocks had reversed course and started to gain as if it was 2013 all over again.

This has produced a V-shaped recovery off of the lows, and prices in the S&P 500 are back to testing those prior all-time-highs, taken from around the 2940 area on the chart.

S&P 500 Daily Price Chart

spx500 daily price chart

The big question is whether sellers come back to re-take control of the matter. While the FOMC didn’t exactly come out as hawkish, they were less dovish than what many market participants were expecting. Odds around future rate cuts have already narrowed: As looked at on Wednesday, there was a 65.5% probability of at least one rate cut by the end of this year. Now – those odds have slimmed down to 50.1%.

fomc rate expectations for rest of 2019

In the S&P 500, a combination of a bearish reversal pattern, a struggle at the prior all-time-highs, combined with a Federal Reserve that came out less dovish than expected, and the theme for US equity pullbacks can grow more attractive. At this point, the big question is what happens upon re-tests of those prior highs around the 2940 area: A show of resistance can re-open the door for bearish scenarios, looking for a downside break of the rising wedge pattern.

S&P 500 Hourly Price Chart

spx 500 hourly price chart

Chart prepared by James Stanley

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts for Q2 have a section for each major currency, and we also offer a plethora of resources on USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

Forex Trading Resources

DailyFX offers an abundance of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you’re looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we’re looking at what we’re looking at.

If you’re looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.

— Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

US: ISM Non-Manufacturing PMI edges down to 55.5 vs 57 expected

The Institute for Supply Management’s Non-Manufacturing PMI fell to 55.5 in April from 56.1 in March and fell short of the market expectation of 57. With the initial market reaction, the US Dollar Index turned south and erased a large part of yesterday’s gains. As of writing, the index was down 0.17% on the day at 97.67.

Commenting on the data, “The non-manufacturing sector has experienced an uptick in business activity, but in general, there has been a leveling off. Respondents are still mostly optimistic about overall business conditions, but concerns remain about employment resources.” said Anthony Nieves, Chair of the Institute for Supply Management (ISM) Non-Manufacturing Business Survey Committee.

Soybeans Analysis: High US supply expectations bearish for soybean prices

By IFCMarkets

High US supply expectations bearish for soybean prices

High US soybean supply estimate is expected to be reported in May WASDE report. Will the soybean prices continue declining?

The USDA is expected to report high soybean supply in its monthly World Agricultural Supply and Demand Estimate to be released on May 10. And while China and US negotiators appear close to reaching a trade deal, China’s import demand appears significantly impaired as African swine fever devastated the country’s hog industry: China’s imports through March were down 17% from year-ago levels. And weather patterns point to increasing likelihood of high US soybean yields contributing to a record crop for seventh year in a row as El Nino extends into autumn. Higher supply estimates are bearish for soybean.

Soybean is falling below MA(200) 05/01/2019 Technical Analysis IFC Markets chart



Get our Weekly Commitment of Traders Report: – See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.


Get Our Free Metatrader 4 Indicators – Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter


On the daily timeframe the SOYB: D1 is below the 200-day moving average MA(200) which is flat.

  • The Parabolic indicator gives a sell signal.
  • The Donchian channel indicates no trend yet: it is flat.
  • The MACD indicator gives a bearish signal: it is below the signal line and the gap is widening.
  • The Stochastic oscillator is in the oversold zone, this is bullish.

We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 843.3. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the upper Donchian boundary at 894.9. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (894.9) without reaching the order (843.3), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary

Market Analysis provided by IFCMarkets

Forex Technical Analysis & Forecast 03.05.2019 (EURUSD, GBPUSD, USDCHF, USDJPY, AUDUSD, USDRUB, GOLD, BRENT)

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

EURUSD is still forming the second descending impulse. Today, the pair may reach 1.1162 and then start another growth towards 1.1188. After that, the instrument may form a new descending structure with the short-term target at 1.1154.

EURUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

GBPUSD, “Great Britain Pound vs US Dollar”



Get our Weekly Commitment of Traders Report: – See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.


Get Our Free Metatrader 4 Indicators – Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter


GBPUSD is still forming the second descending impulse. Possibly, today the pair may reach 1.2992 and then form one more ascending structure towards 1.3033. After that, the instrument may start a new decline with the short-term target at 1.2977.

GBPUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDCHF, “US Dollar vs Swiss Franc”

USDCHF is consolidating around 1.0185. Today, the pair may break the range upwards and then resume growing with the target at 1.0245.

USDCHF
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDJPY, “US Dollar vs Japanese Yen”

USDJPY is consolidating around 111.44. Possibly, today the pair may form one more ascending structure to reach 111.44 and then resume falling with the target at 110.70.

USDJPY
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

AUDUSD, “Australian Dollar vs US Dollar”

AUDUSD has completed another descending structure. Today, the pair may consolidate around 0.6996. Possibly, the price may grow towards 0.7033 and then trade downwards to break 0.6955. After that, the instrument may continue trading inside the downtrend with the target at 0.6925.

AUDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDRUB, “US Dollar vs Russian Ruble”

USDRUB has broken 64.85 and reached 65.47. Possibly, today the pair may fall to return to 64.85 and start a new growth towards 66.02. After that, the price is expected to resume trading inside the downtrend with the target at 63.03.

USDRUB
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

XAUUSD, “Gold vs US Dollar”

Gold has completed another descending impulse. Possibly, today the pair may be corrected towards 1274.28 and then start another decline with the target at 1261.40.

GOLD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

BRENT

Brent has broken 71.60 and reached 70.30. Today, the pair may start a new growth with the target at 71.61. Later, the market may form a new descending structure towards 70.10 and then resume trading inside the uptrend to reach 73.73.

BRENT

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Fibonacci Retracements Analysis 03.05.2019 (BITCOIN, ETHEREUM)

Article By RoboForex.com

BTCUSD, “Bitcoin vs US Dollar”

As we can see in the H4 chart, after reaching the retracement of 38.2%, BTCUSD is trading upwards. However, the pair may yet resume falling toward the retracements of 50.0%, 61.8%, and 76.0% at 4753.00, 4538.00, and 4286.00 respectively. But if the price breaks the high at 5643.80, the instrument may grow to reach the post-correctional extension area between the retracements of 138.2% and 161.8% at 5918.00 and 6085.00 respectively.

BTCUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

In the H1 chart, the uptrend has reached the retracement of 76.0%. At the same time, there is a divergence on MACD, which may indicate a new pullback towards the short-term correctional retracement of 50.0% at 5284.00.



Get our Weekly Commitment of Traders Report: – See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.


Get Our Free Metatrader 4 Indicators – Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter


Bitcoin
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

ETHUSD, “Ethereum vs. US Dollar”

As we can see in the H4 chart, the divergence made ETHUSD start a new correctional downtrend, which may break the low at 146.70 and then continue falling. The downside target is the retracement of 50.0% at 134.07.

Ethereum
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

In the H1 chart, ETHUSD is being corrected upwards and has already reached the retracement of 50.0%. The next upside targets may be the retracements of 61.8% and 76.0% at 165.34 and 169.66 respectively.

ETHUSD

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

FTSE: Financials send index sharply higher

The FTSE index has posted sharp gains on Friday. In the North American session, the pair is at 7,413, up 0.92% on the day. The pair lost over 1.0% on Wednesday, but has recovered most of these losses. In economic news, British Services PMI rose to 50.4 in April, up from 48.9 in March.

HSBC reported an excellent first quarter on Friday, helping boost the blue-chip FTSE. The bank reported that Q1 net profit jumped 33.7% on a year-to year basis. Net profit rose to $4.13 billion, beating the estimate of $3.70 billion. There was further positive news from Anglo American, a mining company which is the world’s largest producer of platinum. Shares of the company have climbed 2.3% on Friday.

All eyes were on the BoE on Thursday, as the bank held its monthly policy meeting. The bank maintained interest rates, but BoE Governor Mark Carney had a hawkish message (warning?) for the markets. Carney said that there could be a number of rate hikes from the bank, if Brexit is resolved and growth and inflation point higher. The markets have priced in just one rate hike until 2021. Carney’s comments didn’t make much of an impact on investors, as the pound was unchanged on Thursday.

The BoE followed the lead of the Federal Reserve, which left rates unchanged on Wednesday. The rate statement noted that inflation pressures are muted and that the FOMC would remain patient regarding future rate movements. Jerome Powell reinforced this stance at a follow-up press conference, saying “we don’t see a strong case for moving in either direction”. The Fed is already on record as saying it does not expect to raise rates before 2020, and with inflation levels persistently below the Fed’s target of 2.0%, the Fed can afford to continue its wait-and-see stance.

Post-FOMC hangover

Brent crude – Correction over or just beginning

Economic Calendar

Friday (May 3)

  • 4:30 British Services PMI. Estimate 50.4. Actual 50.4

*All release times are DST

*Key events are in bold

FTSE, Friday, May 3 at 9:15 DST

Previous Close: 7,413 Open: 7,364 High: 7,415 Low: 7,357 Close: 7,413

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Tim Rudland Joins FXCM as VP of Institutional Sales

Six months after leaving GKFX, Tim Rudland has joined another broker – FXCM.

According to information published on LinkedIn, Rudland has joined the brokerage as vice president of institutional sales.

The iFX EXPO is Back in Limassol!

Rudland’s last role was, as noted, with fellow retail broker GKFX.

Based in the firm’s London office, he was head of trading for two years. Prior to that he worked as assistant head of trading from mid-2015 to the end of 2016.

Rudland got his start in the retail trading world back in 2004.

Having spent a couple of years as a purchasing officer for a shipping company, he joined CMC Markets that year as a dealer.

Suggested articles

FxPro Introduces the Brand New ‘FxPro Direct’ AppGo to article >>

After two years at the brokerage giant, he moved to Saxon Financials – a now defunct company that provided trading and execution services.

During his two and a half years at the firm, Rudland worked as a proprietary trader, systems analyst and metals trader.

Alpari to FXCM

In May of 2009, the new FXCM executive jumped ship again, this time to Alpari, where he took up a new role as senior trader.

Almost five years into that role, Rudland was promoted to become the broker’s assistant head of trading.

Just over a year after that promotion, he switch firms again, joining GKFX in the aforementioned assistant head of trading role.

Rudland’s move into institutional sales comes as many firms in retail trading world have started to focus their efforts on attracting professional clients.

That change has been driven by the European Securities and Markets Authority’s regulations, introduced last August, which place leverage caps on retail traders but not those that classify as professional.

EURUSD Soft Despite Rising Inflation, USD Shrugs Off Mixed NFP – US Market Open

MARKET DEVELOPMENT – FX Pairs Trading in Tight Ranges

DailyFX Q2 2019 FX Trading Forecasts

USD: Tight trading ranges has been the state of play with major USD pairs, despite the release of the NFP report. (full story) The fact of the matter remains the same, the Fed are on pause for the foreseeable, thus diminishing the impact that the jobs data has had on FX markets.

EUR: The Euro trades with marginal losses as we close out the week. The currency had been largely unfazed by the uptick in Eurozone inflation, which saw the core rate jump to a 6-month high, however, seasonal factors stemming from Easter had been at hand for the uptick. As such, a persistent move higher would be needed to encourage the ECB.

EURUSD Soft Despite Rising Inflation, USD Shrugs Off Mixed NFP - US Market Open

Source: Thomson Reuters, DailyFX

DailyFX Economic Calendar: – North American Releases

EURUSD Soft Despite Rising Inflation, USD Shrugs Off Mixed NFP - US Market Open

IG Client Sentiment

EURUSD Soft Despite Rising Inflation, USD Shrugs Off Mixed NFP - US Market Open

How to use IG Client Sentiment to Improve Your Trading

WHAT’S DRIVING MARKETS TODAY

  1. Gold Price May Decline Quickly; Euro & Other Charts to Watch Next Week” by Paul Robinson, Currency Strategist
  2. US Dollar Rally Needs a Fresh Boost From US Payrolls Report (NFPs)” by Nick Cawley, Market Analyst
  3. Gold Rate Outlook: Retesting 2019 Lows, Eyes on NFP Report” by Justin McQueen, Market Analyst
  4. Using FX To Effectively Trade Global Market Themes at IG” by Tyler Yell, CMT , Forex Trading Instructor

— Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

USD/JPY Technical Analysis: Greenback losing steam below 111.70 despite s…

USD/JPY daily chart

  • USD/JPY is trading near 111.50 near a flat 200 SMA suggesting a sideways market.
  • The US nonfarm payrolls (NFP) came better-than-anticipated at 263K jobs in April vs. 185K expected by analysts while Average Hourly Earnings came in slightly lower than expected at 3.2% vs. 3.3% YoY in April. 
  • The reaction in the USD is currently negative despite the stellar NFP numbers.


USD/JPY 4-hour chart

  • USD/JPY is ranging between the 50 and 200 SMA. 

USD/JPY 30-minute chart

  • USD/JPY rejected the 111.70 resistance mentioned yesterday.
  • The market is now trading below 111.55 and its main SMAs suggesting a bearish bias in the short-term. 
  • Bears could drive the market to 111.20 and 111.00 figure while the overall picture on the Yen remains quite neutral for the time being.


Additional key levels