Trade optimism over the past few hours is seeing gold slip further today
Price is now starting to make its way below the 100-hour MA (red line) @ $1,407.21 and is approaching support near the $1,400 handle. If the latter starts to give way, we could see a deeper correction towards support around $1,380-82 and potentially the 200-hour MA (blue line) @ $1,377.38.
Nasdaq is down -1.51%
The Nasdaq index has led a down day in the US stock market. The price of that index fell back below its 50 hour MA (a bearish tilt to the downside) and stayed below. The catalyst was less dovish comments from the most dovish Fed official, James Bullard (or the one who voted to cut rates at the last meeting). He said that 50 bps at the next meeting would be stretch.
100 hour MA at 7864.39 (and rising)
In an earlier post (", the case was made that the break of the 50 hour MA for the Nasdaq index, could see traders leaning against that MA, and lead to a move toward the 100 hour MA (below white line and toward the blue line in the chart below).
As the dollar goes, so does the value of gold (in the opposite direction).
The dollar has reversed higher (was modestly lower at the start of the day). The greenback is still behind the NZD as the strongest of majors, but it is catching up.
The initial test stalled the fall...
(see earlier post here
The low just reached 1.1350 and have seen a modest bounce (at least so far). The holding of the area on the first test, increases the areas importance. A move below is still needed to push lower. A break could, however, lead to stops and a bigger scoot to the downside.
Price falls below 200 bar MA on 4-hour, 50% and 100 hour MA
The comments from Bullard helped to push the price below a cluster support area in the GBPUSD (see earlier post outlining the levels "). That level stalled the fall earlier in the day increasing the levels importance. The break - not surprisingly - triggered stops. The price is now looking toward the 100 bar MA on the 4-hour chart and below that the 200 hour MA at 1.26727 and 1.26519 respectively. The risk is now the cluster (now above).
Finds support the low value area.
Looking at the GBPJPY hourly chart below, the pair has traded mostly between 135.77 below and 136.84 above. Let's call that the value area or area where most of the trading has taken place. AT the high value level, the 136.843 is also the 50% of the move down from the June 11 high. There have been a number of swing levels (see red circles) that stalled at that level.
A potential chink in the bullish armour
The Nasdaq index is trading lower (now down about 50 points or -0.63% at 7952. The low reached to 7940.13. In the process, the price has diipped below the 50 hour MA at 7957.639. Stay below that MA tilts a little of the bias ot the downside for the index.
Risks is defined and limited at the the 1.31504 level.
The USDCAD reached the lowest level going back to March 1 last week when the price extended down to a low of 1.31504. The move higher was helped by rising oil prices on the back of tensions in the middle east.
200 bar MA on 4 hour chart, 50% of last run higher, and rising 100 hour MA
The GBPUSD ran to the highest level since May 21 to 1.27826 today, but has since backed off and has just traded to new session lows at 1.2717. That is right at the 200 bar MA on the 4-hour chart (at 1.27177). The 50% of the last run higher comes in at 1.27121. The rising 100 hour MA is at 1.27064.
EURUSD losing some upside momentum today
The EURUSD is losing some of its upside momentum today and in he process has dipped below a lower channel trend line. The underside of that trend line was retested in the early NY session, but backed off. A flatter upper trend line was developed today that implied a tired market (lacked the slope of the channel to the upside). That helped contribute to the buyers giving up and some profit taking (ie..selling).
The USD is mixed as North American traders enter for the day
As North American traders enter for the day, the NZD is the strongest of the major currencies. The CHF is the weakest (the USDCHF found a bottom and reversed higher - chatter about SNB intervention perhaps). The USD is trading mixed with declines vs the JPY and NZD, and gains vs the CHF, EUR and GBP. The dollar is steady vs the CAD and AUD.
The swissie is the weakest performing major currency today
Of note, EUR/CHF has climbed back above the 1.1100 handle after hitting lows of 1.1062 earlier in the day and came close to testing last week's low of 1.1057. Price is holding just above the 1.1000 level now and the region here is where the danger lies for those betting on further appreciation in the franc.
Price is continuing to sit just under the 1.1400 handle
It's been a relatively quiet session for the pair so far with price action inching towards the lower side on the day under the 1.1400 handle. That said, the trading range remains narrow with price largely seen between 1.1385-00 in the past few hours.
US-Iran headlines are contributing to the softer risk mood
As such, the pair is continuing to make fresh lows since the January flash crash and there isn't too much support that buyers can cling on to from hereon. The 76.4 retracement level @ 106.65 is the next key level to watch with light bids seen around 106.50 but it's going to be all about geopolitical and trade tensions this week.