Trading USD Weakness. Gold Ready to Reverse?

Welcome to this week’s Market Blast Technicals.

I’m Brad Alexander and on behalf of Valutrades let’s take a look today at GBPNZD, Gold (XAUUSD) and USDJPY.

Yesterday we looked at the effects of last Friday’s Non-Farm Payroll report which augmented USD weakness.

We are now seeing a bit of pullback against other currencies like JPY, EUR, AUD and NZD.

Price action on USDJPY for example has returned to this upper trend line but other technical indicators are not showing us much commitment.

If we look at Fibonacci retracements after the last bear run, we can see our key levels and once we see a break of the 38.2% level, the next level below is the 23.6% level at around 108.3 Yen.

We saw USD weakness, and the flight to safety, quickly drive price action on Gold higher into this upper trend line, based on the latest NFP report and other fundamental events.

If we zoom out to the daily chart and look at our Post-COVID Fibonacci we see the obvious key levels and that price is now at the 38.2% level.

We may see price decline if we get a bounce off this level of resistance and a downturn of the Stochastic Oscillator from Overbought.

If we look at Fibonacci on the last bear run, we get coincidentally, a very similar picture so we will wait for a reaction before determining a reversal.

If you like range trading, this is what you get if you have a pair of two equally strong or equally weak currencies.

In the case of GBPNZD, we have two strong currencies and we use support and resistance levels and other technical indicators like the Stochastic Oscillator or the Parabolic SAR to time our entries and exits.

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That’s all for now.  Happy trading with Valutrades and we will see you later in the week with our trading tips video.

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