Trading Outlook for USD, GBP/USD, NZD-pairs, Gold & More

The US Dollar Index (DXY) is putting in a technical pattern set to resolve itself one of these days, a little patience required first.GBP/USD is pulling back but viewed as a buying opportunity at support. A few NZD pairs are of interest. Gold range set to continue.

Technical Highlights:

  • US Dollar Index (DXY) building a triangle
  • GBP/USD pullback could lead to buying opportunity
  • NZD looks likely to weaken versus several currencies
  • Gold range calls for same game-plan, but may soon change

For in-depth fundamental and technical analysis for your favorite market or currency, check out the recently released DailyFX Q2 Forecasts.

US Dollar Index (DXY) building a triangle

The US Dollar Index (DXY) is currently building a triangle beneath the 2015 underside trend-line and April 2017 trend-line. It’s quickly closing in on the apex of the pattern, so a break is likely to come in the next week or so.

The aforementioned resistance coupled with the overall downward trend, a downside break is seen as most probable, but an upside breakout can’t be ruled out. In the event of a breakdown, the 2011 trend-line will be targeted in the area of 8750. On the top-side, a breakout and crossing of resistance will have the bias firmly pointed higher barring a quick failure.

In either case, given that the euro makes up ~57% of the index, EUR/USD will be the main driver of the move.

US Dollar Index (DXY) Daily Chart (Triangle forming)

US Dollar Index (DXY) daily chart, triangle forming

For the intermediate-term fundamental/technical outlook, check out the Q2 Forecast for USD

GBP/USD pullback could lead to buying opportunity

GBP/USD has been quite strong recently until its failure the past session-and-a-half. The pullback at this time is viewed constructive within the context of an upward trend, making support below of interest for potential buying opportunities.

There is a trend-line from early March to watch, but the more important t-line is extending higher from the November low. A hold and turn higher from either line will be our cue to look for another thrust higher. The eventual target is a full retracement of the ‘Brexit’ downdraft over 14800.

GBP/USD Daily Chart (Watching support on pullback)

GBPUSD daily chart, trend-line support below

For the intermediate-term fundamental/technical outlook, check out the Q2 Forecast for GBP

NZD looks likely to weaken versus several currencies

NZD/USDremains stuck in a trading range, with it recently finding opposition again in the ~7350/450 zone. Looking for pressure to remain on kiwi for as long as it stays below. There is a trend-line from December rising up through the range, but given it’s in the range, trust that it will hold is low. A move back towards 7200 may be in the works.

NZD/USD Daily Chart

NZDUSD daily chart with resistance zone

GBP/NZDcontinues to be a favored long on this end. It’s a trade set-up that was highlighted last week after posting a reversal off the July trend-line. As long as that holds along with the reversal day low at 19172, 19643 up to 19838 remains targeted.

GBP/NZD Daily Chart

GBPNZD daily chart set-up

NZD/JPYposted a strong reversal-bar on Friday after bumping into resistance extending back to September. The 200-day MA also runs through this zone, adding further weight. As long as the reversal-day high isn’t breached the outlook will remain bearish.

NZD/JPY Daily Chart

NZDJPY daily chart with key reversal at resistance

For the intermediate-term fundamental/technical outlook, check out the Q2 Forecast for NZD

In FX, we also looked at USD/JPY, USD/CHF, AUD/USD, USD/CAD, EUR/JPY, GBP/JPY, CHF/JPY, AUD/NZD, along with a few others.

Gold range calls for same game-plan, but may soon change

The brutal range in gold, unsurprisingly given the behavior in the dollar, remains a challenge for traders. We continue to hold the view that doing nothing, or fading the perimeter of the range in the 1360s or near 1300 remains the only proposition with decent risk/reward.

However, the dollar, as outlined before, is coiling up for a move, so it might not be long before we see a range resolution. Once we have a resolution, and eventually we will, then we’ll switch gears towards a momentum approach.

Gold Daily Chart

Gold daily chart with range

For the intermediate-term fundamental/technical outlook, check out the Q2 Forecast for Gold

Resources for Index & Commodity Traders

Whether you are a new or an experienced trader, DailyFX has several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

—Written by Paul Robinson, Market Analyst

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