- EURUSD failed to move on from yesterday's breakout attempt
- EURGBP moves suggest hope persists for EU summit breakthrough
- Gold looks increasingly heavy as it posts its lowest levels in weeks
The US dollar fought for change today but didn't quite make it. Pic: Shutterstock
By John J Hardy
Please see today's FX Board PDF attached to this post for the latest Notes of Interest, Trend and Trend Heat readings, as well as a few thoughts on key chart developments below.
EURUSD never got out of the box today after trying to bounce yesterday as the euro was generally offered across the board over the last couple of sessions. The key downside pivot remains near 1.1800, which could set in motion a larger correction back to 1.1500 on the cascading implications in a C-wave style correction. Stay tuned, given what has been a rather treacherous market in many of the major pairs recently.
EURGBP bounced off the critical 0.8750 after the market got encouraging news of Brexit negotiation progress. Alas, the sharp bounce as nervous shorts were squeezed out has unwound rather quickly, suggesting many continue to hope for a breakthrough ahead of next week's EU summit.
AUDUSD teased with a rally overnight on supportive developments that suggested we might see an attempt on higher resistance levels unfold here. Alas, if the pair continues to weaken into a close near or below 0.7600 today, the bears will find encouragement for maintaining the course for new lows for the cycle from here – into the 0.7330 and 0.7160, for example. (The downside from today's highs may have been on a brutal selloff in copper that didn't get underway until the early European session this morning and therefore after the AUD had rallied on Reserve Bank of Australia news and other developments overnight.)
Gold is looking very heavy here, posting its lowest levels in weeks and trading down into the last shreds of the range resistance into the $1260 area and already now up against its 200-day moving average. If the USD punches back stronger, we could be headed much lower – perhaps towards $1225.
Source: Saxo Bank
– Edited by Clare MacCarthy