Daily Technical Analysis by XtreamForex

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AUD/USD AND NZD/USD FUNDAMENTAL WEEKLY FORECAST – RBA EXPECTED TO MAINTAIN DOVISH STANCE

In Australia, the RBA will hold another monetary policy meeting early Wednesday. It is widely expected to leave its benchmark interest rate unchanged. It could also present a dovish outlook for the economy while saying it doesn’t foresee any interest rate hike in the near future. Futures market investors are pricing in the next possible rate hike for November 2019 or later.
The Australian and New Zealand Dollars were initially pressured last week by the divergence in monetary policy between the hawkish U.S. Federal Reserve and the dovish Reserve Bank of Australia and the Reserve Bank of New Zealand.

Later in the week, the Australian Dollar was underpinned by increased demand for higher risk. However, the New Zealand Dollar continued to break sharply in reaction to a dovish rate statement from the RBNZ.

For the week, the AUD/USD settled at .7407, down 0.0034 or -0.45% and the NZD/USD finished at .6777, down 0.0133 or -1.93%.

The price action in the Australian Dollar essentially reflected a shift in investor sentiment with appetite for risky assets like equities increasing. The Australian Dollar also found buying support in Asia following a stronger-than-expected Chinese Yuan fix from the People’s Bank of China (PBOC).
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PRICE OF GOLD FUNDAMENTAL WEEKLY FORECAST – LONGER-TERM OUTLOOK STILL BEARISH AS MARKET NEARS 1-YEAR LOW

The longer-term outlook for gold is bearish, however, over the short-term, we could see some profit-taking or short-covering due to technically oversold conditions. The shorts are still in control and the momentum is to the downside. Additionally, safe haven demand is driving money into the dollar and U.S. Treasurys.

Investors continued to shed long positions in gold last week with the precious metal hitting its lowest level since July 12, 2017. The price action has been primarily driven by a stronger U.S. Dollar and expectations for additional rate hikes by the Fed later this year.

Since gold is a dollar-denominated asset, foreign demand for gold tends to decrease when the U.S. Dollar strengthens. Furthermore, since gold doesn’t pay interest or a divided, it becomes a less attractive investment during a rising interest rate environment.

Last week, August Comex Gold settled at $1254.50, down $16.20 or -1.27%. Since December 31, 2017, gold has lost $59.50 or -4.53%.

The U.S. Dollar continued to be supported last week by the divergence in monetary policy between the hawkish U.S. Federal Reserve and other less-hawkish and dovish central banks. Other catalysts driving the price action in the U.S. Dollar ranged from lingering concerns over a trade war between the United States and its major trading partners, China and the European Union to U.S. economic data to Fed member comments.
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BITCOIN CASH, LITECOIN AND RIPPLE DAILY ANALYSIS

Monday’s rally continued through this morning, suggesting a possible bearish trend reversal beginning, in spite of regulators and governments having yet to roll out new regs. It’s now down to whether investors can hold back from hitting the sell-button to lock in profits.

Monday’s rally continued through this morning, suggesting a possible bearish trend reversal beginning, in spite of regulators and governments having yet to roll out new regs. It’s now down to whether investors can hold back from hitting the sell-button to lock in profits.

Bitcoin Cash Bounces
Bitcoin Cash gained 4.34% on Monday, reversing Sunday’s 1.47% fall, to end the day at $781.1, while also pulling Bitcoin Cash into positive territory at the start of the 3rd quarter.

A relatively range bound first half of the day saw Bitcoin Cash pullback to an intraday low $721.2 by mid-morning, Bitcoin Cash managing to steer clear of testing the day’s first major support level at $717.47 before a mid-day bounce.

Following the broader market, Bitcoin Cash jumped from $735.8 to an intraday high $797.6 in the early afternoon, with Bitcoin Cash breaking through the first major resistance level at $755.47 and second major resistance level at $773.33 to an intraday high $797.6 before pulling back to $780 levels by the day’s end.

For the bulls, Bitcoin Cash came within reach of $800 levels for the first time since sitting at $800 levels back on 23rd June.
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GOLD PRICE PREDICTION – GOLD SURGES FORMING OUTSIDE DAY REVERSAL

Gold prices rebounded sharply on Tuesday, as trade concerns and Trump tweets roiled the capital markets. European PPI accelerated more than expected which could push the ECB into action more quickly than expected paving the way for higher gold prices. Gold prices surged generating an outside day, which is a higher high, a lower low and a higher close which is generally considered a reversal pattern pointing to higher prices. Support is seen near the June lows at 1,237. Resistance is seen near the 10-day moving average at 1,257. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal.

Trump said he hopes the WTO changes its ways
Trump said he hopes the WTO changes its ways and if they don’t treat us properly, we will be doing something. He plans to be meeting with the EU about trade soon as well. He just spoke with the president-elect of Mexico about border security, trade, NAFTA and possibly a separate trade agreement. Trump thinks the president-elect will help with the border. He is also continuing to meet over the Supreme Court candidates and expects to make a decision in the next few days.
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EURO GAINS AS ECB INCREASES RATE HIKE BETS, EUR/USD MAY RISE NEXT

EURO TALKING POINTS:
Euro prices rose as some ECB members fret over late-2019 rate hike bets
Upcoming commentary from Yves Mersch could reveal more details next
EUR/USD’s recent consolidation is met with fading downside momentum.
During illiquid trading conditions given the US Independence Day holiday, the Euro suddenly spiked higher against its major counterparts. Around 16:20 GMT, reports crossed the wires that some ECB members are seeing a rate hike around the end of 2019 as ‘too late’. In the aftermath of this development, EUR/USDmanaged to nearly pare most of its losses when the US Dollar gained as expected.

To give a little bit of context, back in June the European Central Banksent the Euro tumbling despite confirmation of its QE programme coming to an end by the end of this year. What really drove the currency lower was President Mario Draghi’s patience in terms of waiting to raise rates thereafter. This was reiterated at an ECB Forum in Portugal on June 19th.

With that said, any signs to the contrary are likely to have bullish impacts on the Euro. In fact, German front-end government bond yields rose as today’s update crossed the wires. This indicates increasing hawkish ECB monetary policy expectations. Some ECB members were also said today to be a bit uneasy that September/October 2019 policy bets are underpriced.

Going forward, it will be imperative to follow commentary from the European Central Bank to gauge how much follow through there could be had here. In fact, on Thursday we will get commentary from ECB Executive Board Member Yves Mersch. Signs that he favors policy tightening sooner can add fuel to the Euro’s rise and vice versa.
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BITCOIN CASH, LITECOIN AND RIPPLE DAILY ANALYSIS

It’s another bearish start to the day, following Tuesday’s reversal, with only a handful of majors in positive territory early on as the crypto bulls look to take over the reins, Tuesday’s losses suggesting that any major gains will remain short lived near-term.

Bitcoin Cash Back in the Red
Bitcoin Cash fell by 3.29% on Tuesday, partially reversing Monday’s 4.34% gain, to end the day at $755.4.

Upward momentum from Monday’s rally continued through the early part of the day, with Bitcoin Cash rallying through the day’s first major resistance level at $812.07 to an intraday high $831.3 in the early hours before pulling back through the late morning and afternoon to an intraday low $751.1 to bring to an end any hopes of a formation of a near-term bullish trend.

At the time of writing, Bitcoin Cash was down 0.19% to $754, with Bitcoin Cash managing to recover from Tuesdays late in the day slide that spilled over to the early hours of the day, which led Bitcoin Cash to a morning low $738.1 before recovering to $750 levels.

With the day’s first major support level at $727.23 left untested through the morning, Bitcoin Cash will need to move through $779.27 to support a run at $800 levels and the day’s first major resistance level at $807.43, with any move through Tuesday’s $831.3 high bringing $900 levels back into play along with the possibility of a bearish trend reversal.

Failure to move through a morning high $779.27 to $800 levels later in the day could see the Tuesday reversal resume that would bring the day’s first major support level at $727.23 into play, while we would expect Bitcoin Cash to continue holding on to $700 levels in the event of a sell-off.
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GOLD PRICE FORECAST – GOLD MARKETS SLIGHTLY BULLISH IN THIN TRADING ON WEDNESDAY

Gold markets rose slightly during the trading session on Wednesday yet remain very choppy as the geopolitical situation continues to move markets in general. Beyond that, the US dollar has been very noisy as of late as traders try to get a grasp on what is happening around the world as far as trade is concerned.

Gold markets went back and forth during the trading session on Wednesday, rallying slightly as the Americans were away celebrating the Independence Day holiday. This made for a thin market, so I would not take too much to heart with the move to the upside, but I think we are essentially in a situation where we should be waiting for signs of exhaustion that we can start selling. This is because Gold has recently broken below a major uptrend line, and of course the US dollar continues to strengthen overall. However, in the Forex world the US dollar has given back a little bit of the gains, as it may have gotten a bit overbought and was due for a correction.

I believe that the market will eventually go looking towards the $1200 level, and at this point I’m waiting for some type of exhaustive set up to take advantage of the US dollar being offered “on the cheap.” Overall, I think that the market is one that you need to be patient with, and therefore I think the old axiom of “we get paid to wait as traders” certainly applies to this market.

Overall this will continue to be very noisy market, but I think that the patient and prudent trader will find plenty of opportunities in this longer-term downtrend. However, if we were to break above the $1275 level should send this market looking towards the $1285 level.
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AUD/USD FOREX TECHNICAL ANALYSIS – WEEKLY CLOSING PRICE REVERSAL BOTTOM COULD TRIGGER 2 TO 3 WEEK RALLY

Based on last week’s close at .7427 and the chart pattern, the direction of the AUD/USD this week will be determined by trader reaction to .7445. The main trend is down according to the weekly swing chart. However, last week’s closing price reversal bottom may be signaling a shift in momentum to the upside.

Lower U.S. Treasury yields helped boost the Australian Dollar against the U.S. Dollar last week. Yields fell in response to the mixed U.S. Non-Farm Payrolls report which showed a better-than-expected headline number, but an unexpected rise in the unemployment rate and weaker-than-expected average hourly earnings.

The AUD/USD settled the week at .7427, up 0.0020 or +0.27%.

As a result of the jobs report, expectations of a fourth U.S. Federal Reserve rate hike later this year declined. According to the Fed Funds Indicator, investors priced in a 77 percent chance of a September rate hike, down from 80 percent before the jobs data.

So while a September rate hike is still a likely event, traders feel that without an acceleration of wage growth, a fourth hike at the end of the year is a more difficult call and the futures market shows that traders are putting the odds of a December rate hike at about 50 percent.

The drop in Treasury yields made the U.S. Dollar a less-desirable investment, while tightening the spread between U.S. Government bonds and Australian Government bonds.
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BITCOIN CASH, LITECOIN AND RIPPLE DAILY ANALYSIS

The majors were the beneficiary of some favourable news from the South Korean government on Saturday, with the moves through the early part of today to decide whether a bearish trend reversal is about to kick in.
Bitcoin Cash in Recovery

Bitcoin Cash gained 5.81% on Saturday, reversing Thursday and Friday’s declines to end the day at $776.2, with the gains pulling Bitcoin Cash back into positive territory for the week, up 5.26% through to the end of Saturday.

The day’s gains came off the back of a late in the day rally from an intraday low $707.7 through the first major resistance level at $751.33 and second major resistance level at $769.57 to an intraday high $781.7 before easing back to $770 levels, the first major support level at $706.73 left untested through the day.

Saturday’s broad based market rally came off the back of news that the South Korean government will loosen its rules on cryptocurrencies in order to align with the G20’s planned roll out of unified global regulations by the end of July deadline.

At the time of writing, Bitcoin Cash was down 0.69% to $769, with Bitcoin Cash pulling back from a start of the day $783.3 to a morning low $762.2 before recovering.

For the day ahead, a move back through the morning high $783.3 would support a run at $800 levels and the day’s first major resistance level at $802.7. In the event of another rally through the day, in the wake of the latest news from South Korea, we would expect Bitcoin Cash to break out from the second major resistance level at $829.2 to bring $900 levels into play before any reversal.

Failure to move through to $800 levels could see Bitcoin Cash pullback through the afternoon to test support at the first major support level of $728.7 before any recovery.
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MARKET MORNING BRIEFING: POUND IS TRADING CLOSE TO RESISTANCE ON DAILY CANDLES NEAR 1.33


STOCKS

Dow (24456.48, +0.41%) moved up while support near 24000 holds just now. Some sideways trade in the 24000-24750 region is possible in the coming sessions before the index moves up further. Near term looks bullish.

Dax (12496.17, +0.26%) has also moved up and looks bullish for the coming sessions targeting 12800-13000.

Nikkei (22063.74, +1.26%) has broken above 22000 level and if the index sustains above 22000, it could target higher levels of 22400-22600 in the medium term.

Shanghai (2789.08, +1.52%) has room on the downside towards 2700-2650. We do not expect a fall below 2650 in the longer run. The fall is likely in its last phase of the fall and would soon start rising back towards 2800+ levels to move higher in the longer run.

Important level to watch in Nifty (10772.65, +0.21%) is 10800. While the index trades below 10800, bearishness could persist. A sustained break above 10800 would trigger some medium term bullishness. Watch price action near 10800.
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