Remember that you have to have a larger account balance to get access to DMA trading. Tell us, what made you think that gold became bullish? Which timeframe do you analyse to make such a conclusion?
Well, the price of gold is consolidating on the weekly timeframe, but it has breached a couple of resistance levels on the daily chart. Several indicators including MACD, RSI and ADX point out a bullish reversal. And also look at that long downside shadow on August 8. Many heavyweight players jumped in. I suppose they knew about a more dovish rhetoric from Powell.
Well, you were right. Selling gold on highs should have brought you a couple of bucks, huh? I hope you closed shorts as I can see a strong support around $1700 per ounce. What would you guys say about the greenback’s strength? Would it last throughout the whole fall? I managed to catch a trend on USD/ZAR and EUR/USD last week. Now staying squared so far.
Yeah, I jumped off the shorts on gold. It might test 1700 again, but you never know. Now watching oil. I think it will rebound a bit and keep surging again. When it comes to the greenback, the rally was rather predictable. The Fed has nothing but to raise rates to give the inflationary pressure, while the NFP figure does not matter too much at this stage, in my opinion. The greenback will keep strengthening versus emerging market currencies as long as the equity market will keep retracing from the recent highs. Stocks might lack support from the endless pumping of free cash into the financial sector. But Euro is underestimated, and I expect a rebound towards 1.17/18 at least.
So do you think the Loonie will follow the price of oil and strengthen versus the greenback as well? I mean USD/CAD to decline.
Well, you were right about the direction as USD/CAD dropped almost 300 pips recently. But I do not think that USD/CAD would continue declining sharply in the upcoming weeks. Yes, the price of oil supports the Canadian dollar, adding selling pressure on the pair. But the greenback is getting stronger as well, so I expect consolidation here. Besides, US 10-year yields are going to soar again on the expectations of higher interest rates in the United States. Thus I would stay away of USD/CAD.
USD/CAD went off the descending channel, completed the bullish reversal pattern on the four-hour timeframe, tested the former resistance curve and rallied North. There was a strong buy-signal with a long downside shadow of the intraday candlestick. The signal was confirmed by Stochastic RSI as the oscillator had a bullish divergence and went off the oversold zone. I would consider fresh longs from here as the oscillator has been reloaded again. Coming back to the DMA trading with the trade.com broker, I should note quite a volatility of Tesla shares, which was rather predictable given the behaviour of Elon Musk in social media.
Look, there was a fundamental driver for that rally. The greenback strengthened versus all of the major peers on the back of higher-than-expected inflation figures reported last. It feels like the Fed would not have any other choice rather than hiking the interest rates. If that is confirmed, the US dollar should keep strengthening. This guy keep laughing at the laws of financial markets. His style is a bit crazy, but it feels like he knows what to do with all that.