Daily Technical Analysis by XtreamForex

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Gold Trades Sideways Following Soft Inflation Figures

Gold prices attempted to rally on Thursday but were unable to breach through resistance near the 50-day moving average at 1,212. A softer than expected Consumer Price index in the US weighed on treasury yields and put downward pressure on the dollar which initially buoyed gold prices.
Technical Analysis

Gold prices where capped on Thursday attempting to rally but failing at resistance. Support on the yellow metal is seen near the 20-day moving average at 1,198. Momentum has turned positive as the fast stochastic recently generated a crossover buy signal. The index is accelerating upward which points to accelerating positive momentum. The MACD (moving average convergence divergence) histogram is printing in the black with an upward sloping trajectory which points to higher gold prices.On the heels of Wednesday’s softer than expected Producer Price Index, the Labor Department followed that report with a softer than expected CPI index report. According to the BLS, U.S. consumer prices rose less than expected in August driven by decline in gasoline and apparel.
CPI was Weaker than Expected in August
The Consumer Price Index increased 0.2% in August after a similar gain in July. On a year over year basis the August, the CPI increased 2.7%, slowing from July’s 2.9% rise. The core CPI which excludes a volatile food and energy component, increased by 0.1%. Core CPI had increased by 0.2% for three straight months. The year over year August, core CPI increased 2.2% after rising 2.4% in July. Expectations were that CPI would increase by 0.3% on the headline and 0.2% on the core in August. The softer numbers show that the increase in wages that has been evident in the August employment number and the July JOLTS report have not spilled over into higher producer or consumer prices. This could allow the Fed to remain on hold in December.
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Bitcoin Cash, Litecoin and Ripple Daily Analysis – 17/09/18

It’s been a mixed start to the day, the majors giving up gains from earlier in the day, key levels needed to be held on to in support of an afternoon rally.
Bitcoin Cash Steadies
Bitcoin Cash gained 0.6% on Sunday, following Saturday’s 0.29% rise, to end the day at $450.7, with the weekend’s minor recovery leaving Bitcoin Cash down 6.4% for the week.
A particularly choppy day saw Bitcoin Cash take a tumble through the day’s first major support level at $440.03 and second major support level at $431.77 to an intraday low $425.1 before bouncing back to $440 levels. A boost late in the day saw Bitcoin Cash move through to an intraday high $452, coming up short of the day’s first major resistance level at $459.53 before easing back to $450.
At the time of writing, Bitcoin Cash was up 1.8% to $458.7, with Bitcoin Cash rallying at the start of the day to a morning high $463.4 before easing back. The moves through the early part of the day saw Bitcoin Cash test the first major resistance level at $460.1, while leaving the first major support level at $433.2 left untested.
For the day ahead, holding on to $450 levels would support another run at $460 levels and the day’s first major resistance, with a breakout to test the second major resistance level at $469.5 in play should Bitcoin Cash avoid a late in the day reversal.
Failure to hold on to $450 levels could see Bitcoin Cash fall pullback to $440 levels, while we would expect the day’s first major support level at $433.2 to be left untested barring materially negative news hitting the wires,Litecoin Up for a 4th Consecutive Day
Litecoin gained 0.87% on Sunday, following Saturday’s 0.57% rise, to end the day at $56.84, the weekend moves giving Litecoin a 3.53% gain for the week.
Tracking the broader market, Litecoin fell through the day’s first major support level at $55.22 to an early morning intraday low $54.45 before recovering. Support through the rest of the day saw Litecoin move to a late in the day intraday high $57.45 before easing back to $56 levels, the day’s high falling short of the first major resistance level at $58.4.
At the time of writing, Litecoin was up 0.11% to $56.84, with an early move to a morning high $57.85 hitting reverse, Litecoin sitting just above a start of a day $56.8 low, the moves through the early hours leaving the major resistance and support levels untested.
For the day ahead, a move back through to $57 levels would support another run at the day’s first major resistance level at $58.04, while we would expect Litecoin to fall short of $59 levels and the second major resistance level at $59.25, resistance expected to materially build on any moves through $58 levels.
Failure to move back through to $57 levels and the morning high could see Litecoin hit reverse later in the day, with any pullback through $56.25 bringing sub-$56 levels and the day’s first major support level at $55.04 into play, more material declines dependent upon the news wires on the day.

 

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EUR/USD Is Neutral

The market will be focused on the trade war between the US and China, as the US may announce new customs duties as early as this Monday, which may make China refuse the scheduled trading terms talks.
The EUR/USD is not changing a lot early this week, with the last week Friday being very volatile.

On Thursday, the ECB decided to minimize its QE from Oct to Dec, and then to cut the QE completely, which pushed the EUR up. On Fri, everything changed, as the greenback got supported by a sharp increase in the US bond prices and the safe haven assets becoming in-demand, as the US is again going to impose new customs duties on Chinese goods.

The market will be focused on the trade war between the US and China, as the US may announce new customs duties as early as this Monday, which may make China refuse the scheduled trading terms talks. This is likely to maintain the investor interest towards the safe haven instruments.

As for the ECB meeting, Mario Draghi’s tone was somewhat hawkish. The European Central Bank governor says there has been less uncertainty in inflation forecasts, and this is good. He is sure that the QE may come to an end this year. The Eurozone economy is going to rise by 2% this year and by 1.8% next, which is somewhat lower than expected, but still quite good in case no stimulus remains.

Meanwhile, the Fed meeting is scheduled in around 10 days, so the EUR/USD still has some time to get stable.

Technically, the EUR/USD is trading within another rising wave, which started after the pair broke out the downtrend resistance. The price managed to reach the projection channel resistance area and attempted to approach to the current high. The downtrend that followed was none other than correction, so once it was over, the pair started rising again. The immediate target is now $1.1705, and then the major high at $1.1734. Conversely, if the price manages to break out the support at $1.1617, the pair may go down to reach another support at $1.1617.
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Bitcoin – Bitcoin Bucks the Trend Early. Will Institutional Money Help?

Bitcoin sees red early, giving gains from the start of the day. A move back through to $6,500 will be a must to support an afternoon rebound.
Bitcoin bucked the trend across the broader market by ending in the red on Sunday, with a 0.2% fall that partially reversed Saturday’s 0.5% gain. Bitcoin ended the week at $6,500, gaining 3.92% to partially reverse the previous week’s 14.3% slide.

A choppy start to the day saw Saturday’s late in the day reversal continue into the early hours of Sunday, with Bitcoin falling through the day’s first major support level at $6,461.47 and second major support level at $6,410.23 to an intraday low $6,370.2 before recovering back to $6,500 levels.

Through the 2nd half of the day, Bitcoin slid through the first major support level at $6,461.47 to an afternoon low $6,413.8 before breaking back through to $6,500 levels by the day’s end.

While the news wires were relatively silent through the weekend, supporting the net gains for Bitcoin and the broader market, focus is beginning to shift to the next phase of the cryptomarket movement, institutional money.

For now, Bitcoin continues to be touted as the primary beneficiary, which looks to be an accurate assessment, with financial institutions recently announcing plans to provide their clients with products to gain Bitcoin exposure, the announcements coming in the wake of Goldman Sachs’ decision to hit pause on launching its Bitcoin desk.

Whether the influx of institutional money will lead to a resurgence of Bitcoin’s dominance remains to be seen, though the reality is that such a limited product offering to an asset class will likely see existing cryptocurrency investors shun alt coins in favor of Bitcoin, drawn by the anticipated inflow of institutional money.
Does that mean that the crypto market is still some way off performing based on product offering and success in the real world?
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Bitcoin – Bulls Eye $6,400 as Mixed Sentiment Hits the Market

Recovering from an early loss, Bitcoin will need to hold on to early gains for more upside later in the day, some profit taking likely to come into play.
Bitcoin gained 1.31% on Tuesday, partially reversing Monday’s 3.92% fall, to end the day at $6,334.
A relatively range bound early morning saw Bitcoin move from a start of a day intraday low $6,228.1 to a morning high $6,291.5 before easing back, $6,300 back to being the line in the sand for the Bitcoin bulls following Monday’s reversal.
Tracking the broader market, a mid-day rally saw Bitcoin move through to an early afternoon intraday high $6,384 before easing back to sub-$6,300 levels, late in the day support seeing Bitcoin recover to $6,300 levels by the day’s end.
While Bitcoin has tended to be the barometer for the broader cryptomarket, Ripple’s XRP may have stolen the show on Tuesday, with news of Saudi bank the National Commercial Bank adopting the Ripple platform driving sentiment through the day.
Adding to the upside for Bitcoin and the broader market were comments from the SEC Commissioner that were crypto friendly, the Commissioner stating that the government shouldn’t pin back the expansion of the cryptomarket by limiting the release of new crypto products.
While U.S Commissioner Peirce is considered to be on the “For” side of the crypto camp, the comments were certainly supportive following a string of Bitcoin ETF applications being declined.
As the markets prepare for the Mt.Gox flood of cryptocurrencies, a Bitcoin ETF approval and inflow of institutional money would be quite timely, particularly when considering the fact that institutional money should smoothen out the volatility, though ultimate influence may well reside with the Bitcoin whales.
Of greatest significance on the day however was a sign that product differentiation and success could deliver price direction, with Ripple’s XRP investors being rewarded for the successes of the Ripple team and the continued adoption of Ripple’s platform by financial institutions the world over.
At the time of writing, Bitcoin was up 0.26% to $6,352.1, a relatively choppy start to the day seeing Bitcoin pullback to a morning low $6,315 before moving through to a morning high $6,375.1, the early moves leaving the day’s major support and resistance levels untested.
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Gold Prices Rise as US Dollar Sinks, Crude Oil Eyes OPEC Meeting

GOLD & CRUDE OIL TALKING POINTS:
Gold prices rise as US Dollar sinks in risk-on trade
Crude oil prices down following Trump jawboning
OPEC meeting, FOMC rate decision now in focus
Gold prices managed to secure an upswing as the supportive influence of a weaker US Dollar outweighed headwinds from rising yields. Ebbing haven demand appears to have accounted for the greenback’s weakness. It fell alongside Treasury bonds while stocks surged.
Pre-positioning ahead of next week’s FOMC monetary policy announcement (admittedly not of the kind expected) might account for the move. A rate hike is all but fully priced in for this month and the probability of another on in December now stands at a formidable 80 percent.
On balance, that creates more scope for volatility in the event that the Fed surprises on the dovish rather than the hawkish side. That probably made for a strong impetus to unwind exposure considering the latest COT statistics put speculative positioning at its most net-long in 16 months.
Meanwhile, crude oil prices fell as US President Trump took OPEC to task via Twitter, saying it “must get prices down now!” Iran railed against the creation of a US-friendly OPEC alternative, lending credence to reports of such efforts being underway. Russian output was also said to have hit a post-Soviet high.
MARKETS LOOK AHEAD TO OPEC MEETING, FOMC

Preemptive portfolio rebalancing is likely to remain an important catalyst for price action in the final hours of the trading week. Crude oil will look ahead to the weekend’s meeting of the OPEC Joint Technical Committee in Algiers while gold will probably continue to focus on next week’s Fed conclave.
What this means in terms of directional bias is unclear. For oil, reluctance to hold exposure over the weekend may translate into standstill until the outcome of OPEC’s gathering is made known. Gold may be similarly indecisive, though another supportive risk-on swell should not be discounted.
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Gold Price Prediction – Gold Edges HIgher but Cannot Break Out

Gold prices moved higher on Thursday, buoyed by a drop in the dollar, as yields pulled back. US 2-year yields hit a decade old high on Wednesday and appear to have pulled back despite robust economic data. The dollar tumbled through support levels giving a boost to commodities like gold that are priced in US dollars.
Technical Analysis

Gold prices edged higher but were unable to push through resistance near the 50-day moving average at 1,307. Support on the yellow metal is seen near the 20-day moving average at 1,200. Prices are trading sideways which has pushed the Bollinger band width to the lowest levels seen since June which reflects declining volatility. Short-term momentum has turned positive as the fast-stochastic generated a crossover buy signal. The MACD (moving average convergence divergence) histogram is printing in the black with an upward sloping trajectory which points to higher prices.Jobless Claims Drop Following Hurricane Florence
The commerce department reported that US Initial jobless claims, fell by 3,000 to 201,000 in the week ended Sept. 15. Expectations were for claims to rise by 4,000. This marks the lowest level since 1969. Continuing claims also declined by 55,000 to 1.65 million. They have fallen to the lowest level since 1973. The drop in jobless claims was mostly attributed to the disruption caused by Hurricane Florence. Since those without jobs were unable to file a claim or pick up checks, the numbers dropped more than expected. The numbers show that the jobs market remains tight and wages are on the rise. This continues to point to the Fed increasing interest rates when they meet later this month.
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AUD/USD Forex Technical Analysis – Facing Series of Retracement Zone Resistance Levels

Based on last week’s price action and the close at .7288, the direction of the AUD/USD this week is likely to be determined by trader reaction to the short-term 50% level at .7284.
The Australian Dollar settled higher last week in what was essentially a follow-through move fueled by the closing price reversal bottom from the week-ending September 14. The rally looks impressive on the daily chart, but on the weekly chart, it is basically a retracement of a short-term range.
Typically, the reversal chart pattern triggers a 2 to 3 week counter-trend rally. The rally is usually 50% to 61.8% of the current range. The Forex pair already hit this objective so the counter-trend rally may be over. If not, it’s going to be a grind because of additional retracement levels overhead.
For the week, the AUD/USD finished at .7288, up 0.0133 or +1.86%.
Weekly Swing Chart Technical Analysis
The main trend is down according to the weekly swing chart. However, momentum shifted to the upside following a closing price reversal bottom and the subsequent confirmation of the chart pattern last week.

A trade through .7085 will negate the reversal chart pattern and signal a resumption of the downtrend. The main trend will change to up on a trade through .7484.Weekly Swing Chart Technical Forecast
Based on last week’s price action and the close at .7288, the direction of the AUD/USD this week is likely to be determined by trader reaction to the short-term 50% level at .7284.

A sustained move over .7284 will indicate the presence of buyers. If this move attracts enough buyers then look for the rally to extend into the short-term Fibonacci level at .7332.

Overtaking .7332 will indicate the buying is getting stronger with the next target zone .7381 to .7381.

A sustained move under .7484 will signal the presence of sellers. The first downside target is 50% of the first leg up from the reversal bottom. This level is .7195. If it fails then look for the selling pressure to increase with .7085 the next target.
The short-term range is .7484 to .7085. Its retracement zone at .7285 to .7332 is the first upside target. This zone was tested last week.
The intermediate range is .7677 to .7085. Its retracement zone at .7381 to .7451 is the next potential upside target.
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Gold Price Futures (GC) Technical Analysis – Remains Trapped Between Pair of Retracement Zones

Based on Monday’s price action and the close at $1204.40, the direction of the December Comex Gold market today is likely to be determined by trader reaction to the 50% level at $1205.90.
Gold futures closed higher on Monday while posting an inside move. The price action suggests investor indecision and impending volatility. The catalysts behind the movement were a two-sided trade in the U.S. Dollar and position-squaring ahead of the Fed’s widely expected interest rate hike on Wednesday. Volume was light and liquidity thin due to bank holidays in Japan and China.
December Comex Gold futures settled at $1204.40, up $3.10 or +0.26%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through $1215.80 will change the main trend to up, but additional main tops come in at $1218.00 and $1220.70.
A trade through $1196.00 will signal a resumption of the downtrend. This is followed closely by main bottoms at $1192.70 and $1189.50.
Since mid-week, the market has been trapped by a pair of retracement zones at $1205.90 to $1215.10 and $1193.90 to $1187.50.
Continue to look for a sideways trade as long as gold remains inside these retracement zones.
Daily Swing Chart Technical Forecast
Based on Monday’s price action and the close at $1204.40, the direction of the December Comex Gold market today is likely to be determined by trader reaction to the 50% level at $1205.90.
A sustained move under $1205.90 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to extend into $1193.90 to $1187.50.
The trigger point for a potential acceleration to the downside is $1187.50. The chart is wide open under this level with $1167.10 the next likely target.
A sustained move over $1205.90 will signal the presence of buyers. If this move can generate enough upside momentum then look for a drive into $1215.10 to $1222.70.
The trigger point for an acceleration to the upside is $1222.70. The daily chart shows is that if this price is taken out, the market could surge into $1235.80.
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Trump v Powell: 2 Speeches to Hit the Dollar

Kiwi Dollar spikes on less pessimistic business sentiment, with Trump and Powell in the spotlight later today to hit the Dollar and the majors.
Earlier in the Day:
Economic data released through the Asian session this morning was limited to August trade and September business confidence numbers out of New Zealand.
For the Kiwi Dollar,
The August trade deficit widened from a revised NZ$4,500m to $4,810m in August, year-on-year, and from a revised NZ$196m deficit to a NZ$1,484m deficit, month-on-month, which was far worse than a forecasted widening to a NZ$930m deficit and the largest ever monthly goods trade deficit. According to NZ Stats:

The month-on-month rise in imports to near record levels occurred at a time when exports are traditionally at their lowest.
Imports increased by NZ$675m (14%) compared with August of last year, to hit NZ$5.5bn, the 3rd highest on record, while exports rose by just NZ$366m to reach NZ$4.1bn.
The jump in imports was attributed to a NZ$186m (+50%) rise petroleum and products imports, driven by increased imports of crude oil (up NZ$98m) and diesel (up NZ$73m), which was as a result of rising prices, volume imports down 13% year-on-year.
On the export side, meat and edible offal lead the uptick, rising by NZ$137m (+43%), with NZ exporting more beef and lamb at better prices. The export of sheep rose by NZ$83m (+55) and beef by NZ$45m (+31%).
The Kiwi Dollar moved from $0.66433 to $0.66387 upon release of the figures that came ahead of the business confidence number.
The September ANZ Business Confidence survey saw a net 38.3% of respondents expecting economic conditions to deteriorate over the next 12-months, improving from a net -50.3 in August.

Firms’ perceptions of their own activity prospects rose by 4 points to a net 8% expecting an improvement.
Retail expectations dropped 11 points to -13%, while services were the most optimistic.
A net 9% of firms are expecting to reduce investment, down by 4 points, while employment intentions rose by 5 points to -1%.
Profit expectations rose by 4 points to -13%, with retail the weakest sector, down 8 points to -35%.
A net 33% of businesses expect it to be tougher to get credit.
Firm’s pricing intentions rose by 3 points to +30%, while inflation expectations remained relatively steady at 2.1%.
Residential construction intentions jumped by 11 points to +24%.
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