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Friday Update on S&P500, Gold and EUR/USD

Tomasz Wiśniewski

Today we see that markets are finally looking outside of the Coronavirus crisis as tensions around Hong Kong are renewed and a clash between China and the US is once again stirred. Jobless claims were probably a better topic, but here we are. Recent developments have triggered a small correction in the bullish sentiment which has allowed sellers to gain some traction. The reversal is still relatively small and it seems like buyers have it all under control.

Let’s start with the SP500 which is currently bouncing from the upper line of the flag, which was broken at the beginning of the week. As long as the price stays above the line of the flag, the buy signal stands. The best scenario for now is a breakout of the 2980 resistance level which has persisted since the end of April. In the least, we may see that level tested.

Moving on to Gold, which is currently testing the ultra-crucial resistance level of 1740 USD/oz, where not one, not two but three resistances were met.  The first is a mid-term up-trendline which was broken yesterday so this is the first time we test this level as a resistance. The second is the upper line of the wedge pattern – which is promoting a rise. The third is a horizontal barrier, which was already stopping buyers in the second half of April. A breakout of any of these three resistances would give us the ultimate buy signal.

Lastly, we’ll checkout the EURUSD where the price is collapsing after being wounded by the triple top formation and a false breakout from the symmetric triangle. For now, buyers can catch a breath at the horizontal support of around 1.088 but with the negative factors mentioned above, the sentiment is definitely negative.

This article was originally posted on FX Empire

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