Four reasons for USD strength – Gold, Silver in symmetrical pennants [Video]

Brad Alexander FX Large Limited

In today’s Market Outlook, let’s take a look at Forex Trading on WTI Crude Oil, Gold, XAU/USD, Silver, GBP/USD, NZD/USD, and EUR/USD.

We see USD strength right across the board, and it’s really important for traders and investors to understand why.

Firstly, we just saw the latest CPI and PPI; in other words, Inflation figures were reported higher than expected, and these figures always bolster a currency.

Secondly, U.S. Treasury yields are higher, which has investors buying USD to invest in Tbills.

Also, the price of crude is still elevated, which is a clear sign that inflation fears will continue.

And, finally, all of the above points to the fact that the Fed will not likely be able to lower interest rates anytime soon.

We see EURUSD at support at around $1.65, and price action has already broken through key levels.

If we move out to the daily chart, we see price action breaking a huge double top and many key levels below.

Technically, we see bearish indicators with the signal line breaking out of the MACD histogram and a falling stochastic oscillator.

I encourage you to investigate all USD charts like this one on NZDUSD, where we have clear key levels and, right now, a very bearish MACD.

And, for you traders who rely solely on technical indicators, you need to be very aware of fundamental analysis, as geopolitical issues, investor preferences, and the US Federal Reserve will drive the value of USD.

This is also affecting gold as we see 4 days of red candles, and the bodies are getting longer.

We see price action in a symmetrical pennant, and we will watch our technical indicators and the lower trend line as price action falls.

We see similar characteristics in Silver, but again, keep an eye on the news and the relative strength of USD.

We see the same thing again on the WTI daily chart, but fundamentals are driving the price of crude.

Yesterday, Donald Trump said that the US doesn’t need to open the Strait of Hormuz.

Technically, this is true as the US has enough oil.

However, the price is at $102 per barrel, which is seriously hurting the US economy, and this seriously affects inflation, and the chances of the US Federal Reserve lowering interest rates.

And finally, one of the weakest currencies is GBP, for one reason: political instability.

Keep your eye on the news, as almost any positive news out of London may reverse the trends in GBP pairs.

Author

Brad Alexander

FX Large Limited

Brad became fascinated with the Currency Markets from a young age and researched fundamental analysis.

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