Sim Moh Siong of Bank of Singapore says the euro remains likely to be "stuck in a listless choppy trading range" over the next one to three months.
Rodrigo Catril of National Australia Bank says the greenback is likely to outperform emerging markets in Asia as well as the Australian dollar.
As far as the trade war between the U.S. and China is concerned, we’ve seen the move by the Trump administration and the retaliation by China. Both moves were already on the table so no surprises there. One factor that could really get gold bulls talking would be if China slaps a duty on U.S. oil. This move would take the trade war to a new level of seriousness.
Based on Friday’s close at $1278.50 and the early price action, the direction of the August Comex Gold futures contract the rest of the session is likely to be determined by trader reaction to a downtrending Gann angle at $1282.40 and an uptrending Gann angle at $1283.90.
Based on Friday’s close at .7443, the direction of the AUD/USD on Monday is likely to be determined by trader reaction to the uptrending Gann angle at .7447.
Investing.com - Federal Reserve tightening looks likely to remain a strong headwind for gold in the coming week after the precious metal tumbled on Friday to mark the lowest settlement since December, well below the psychologically important $1,300 level.
Investing.com - The diverging monetary policy outlook between the Federal Reserve and the European Central Bank is likely to boost the dollar and weigh on the euro in the coming week, by making the dollar more attractive to yield-seeking investors.
Gold’s freefall wasn’t much of a surprise to investors who have watched the market fail to respond to potentially bullish news over the last month including trade war tensions, the political turmoil in Italy, the economic turmoil in Venezuela. Despite the bearish outlook, we do think that conditions could turn quickly to the upside if a steep break in equity prices encourages strong flight-to-safety buying.
The Dollar/Yen rose last week, primarily helped by the widening of the spread between U.S. Government Bonds and Japanese Government Bonds. The movement in the yields reflects the divergence between the hawkish Fed and the dovish BOJ. There was some selling pressure, however, late in the week related to safe-haven buying of the Japanese Yen, tied to US-China trade tensions.
Based on Friday’s close at .7443, the direction of the AUD/USD on Monday is likely to be determined by trader reaction to the former bottom at .7448.
Based on the close at $1278.50, the direction of the gold market on Monday is likely to be determined by trader reaction to the main bottom at $1286.80.
The Fed voted to raise its benchmark interest rate for a second time this year. The European Central Bank (ECB) revealed its plan to exit from quantitative easing (QE), but also said it’s not likely to raise interest rates until July 2019. The BOJ voted to maintain its ultra-loose monetary policy and downgraded its view on inflation, signaling that it will lag well behind its U.S. and European peers in rolling back crisis-era stimulus
Gold markets initially tried to rally during the week, breaking above the $1300 level. However, we ended up turning around and breaking down through a major uptrend line. This is a very negative turn of events, and we are closing towards the bottom of the range for the week, which is also a very negative turn of events.
The US dollar has rallied during the trading sessions that make up the week against the Japanese yen, wiping out the shooting star from the previous week. However, there are a lot of conflicting issues out there right now that could keep this market somewhat range bound.
The US dollar has exploded to the upside during the week, breaking through a significant amount of resistance against the Canadian dollar. Oil markets course could help if they start to fall, but quite frankly I think a lot of this has to do with fears about trade spat between the US and Canada.
The New Zealand dollar broke down significantly during the week, slicing through the 0.70 level, and formed a nasty red candle. At this point, by closing as low as we did on this candle, it suggests that the sellers are very much still alive.
The British pound fell during the week, slicing through the 1.33 level as the US dollar gain against most majors. We tested the bottom of a hammer from a couple of weeks ago but did bounce on Friday to show signs of resiliency. At this point, we could be looking at the next major move just waiting to happen.
The British pound went back and forth during the week, reaching towards the ¥147 level before pulling back. We have formed a bit of a neutral candle, and I think a lot of traders are concerned about potential trade wars between the United States and China. With the Americans adding more tariffs and the Chinese promising to retaliate, it’s very likely that this pair continues to be very noisy.
The EUR/GBP pair went back and forth during the trading sessions that make up the week, as we continue to find the 0.88 level above resistive enough to keep this market down. However, I think that the sideways action of this market keeps a lot of longer-term traders on the sidelines.
The Australian dollar fell significantly during the week, crashing through a short-term uptrend line, and then of course the psychologically important 0.75 level underneath. We did not break below the bottom of the hammers from last month, but at this point it’s likely that closing as low as we did signify that we are going to.
Gold markets broke down significantly during the trading session on Friday, as people start running towards US treasuries in the face of a potential trade war. It’s likely that we will continue to see a lot of volatility in this market, but what’s more telling is the fact that we have broken through a major uptrend line that extends back to December 2016.
The US dollar fell against the Japanese yen during the trading session on Friday after initially trying to rally, as we have seen tariffs levied on the Chinese, and of course the Chinese are getting ready to respond as I record this. At this point, this has a bit of a “risk off” feel to it, and I think that we could go looking towards support below.
The US dollar has rallied significantly on Friday against the Canadian dollar, as there has been a bit of a “risk off” move during the day as tariffs were slapped on the Chinese by the Americans, that of course has the commodity currencies falling overall.
The New Zealand dollar has gone back and forth during the trading session on Friday, showing signs of confusion and of course difficulty near the 0.6950 level. Overall, this is a market that I think will continue to be very noisy.