|AUD||Neutral -> Bearish|
AN coming off highs from 2018 after RSI hits a significant level of 83. The pair is looking more volatile now as the 4H candle closes below the rising trend line. Analyst at HYCM, Giles Coghlan, mentions that the pair moves similarly to the S&P 500 which has recently broke all-time highs. However, gold is also taking a break amidst the ending of the so-called 'shortest bear market' for US stocks. This also affects Aussie pairs due to a gold-heavy economy. 65% of traders are net short according to DailyFX and sentiment is mixed now that price has been climbing higher for the past several months.
Despite the punishment this pair has taken recently, we still remain bullish with the thesis that USD will see a rally soon. The daily candle showing some pressure to the upside, and a close above the trend line would be a good sign that price wants to start moving back up again. Cutting production has boosted demand for oil and has fueled the CAD sending this pair in a downtrend. Any news on oil will most likely affect this pair as the USD rally may be able to start.
EJ continuing to push lower here on the 4H chart. German and French PMI news is to be reported for this month with mixed forecasts. Some forecasts are suggesting a lower PMI data for the German economy and higher for the French. 4H candle crossed under the rising trend line, showing signs of weakness on the up trend. 53% of traders are net short on the pair so sentiment is still mixed, but traders may start going back to risk-off sentiment and hold the yen as it is considered a safe haven.
Gold continues further to the downside as it approaches its 200 period moving average. The Federal Reserve decided not to cap the yield curve which investors took as bad news. A weakening dollar is still impacting lots of pairs like USD/CAD, so it might seem odd that we are bullish on gold yet expecting a rally in the USD. Gold seems to be the move in the long run, but the USD might see some more demand as the US economy is slowly deteriorating due to combined risks with China, inflation, unemployment stimulus expiring, and much more.
Please note that this email is my personal opinion only. I am not a licensed financial advisor, and any information shared or discussed is not to be construed as investment advice. Trading and investing involves a degree of risk, and is not suitable to all investors. Please consult with your financial advisor before making any sort of investment decisions.
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