Gold (XAUUSD) Consolidating. WTI (USOil) Climbing. CAD = Strongest Currency GBP = Weakest Currency
Hey Valutraders! Have you seen this Symmetrical Pennant on Gold?
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I’m Brad Alexander and in today’s Market Blast, let’s look at USDCAD, GBPUSD, WTI (USOil), GBPCAD, and gold (XAUUSD).
Yes, Gold is consolidating again and, if this turns out to be a bullish formation, could we be looking at a move to the upside?
We need to be careful as the daily chart is still in a downtrend but price action entered the pennant from the $1800 range.
If Gold is to increase in value, then it will need some help from the USD.
USD is strong right now except for a couple of exceptions.
Last week the US Fed did not raise Interest Rates but the strength comes from the comments that they may still raise rates this year.
If that changes, we will see a weaker USD.
One of the exceptions is USDCAD even though price action tried to break to the upside in this double bottom.
We see price bouncing off this upper trend line and the stochastic oscillator looking overbought.
However, wait for confirmation before selling this.
Overall CAD is the strongest currency. Why?
Because the price of WTI keeps climbing which is always good for CAD.
We have a few technical signs of consolidation but they are not conclusive to be honest.
MACD has been bullish since August but lately, it has been quite flat.
The same can be said of the stochastic oscillator and we see price action consolidating as well.
Right now, OPEC and news about the Chinese economy will drive the price of crude oil.
The weakest currency is GBP based on the fears of a worsening economy in the UK and the fact that the Bank of England did not raise rates last week.
If we look at the daily chart on GBPUSD we see lots of bearish indications in MACD and the stochastic oscillator and room to move to the downside with key levels of support below.
If we look at the strongest versus the weakest, GBPCAD, we see a similar situation but more pronounced with key levels of support even further below.
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