Gold Price Continues to Dominate Market Sentiment

Gold Price Continues to Dominate Market Sentiment

XAU/USD

XAU/USD Forecast for September 9

Gold has been trending lower for a while now. If you’re looking to jump in on a short, you may want to consider this setup on the 4-hour time frame.

Connecting the most recent highs on XAU/USD where the currency pair topped out on August 14 and August 28, a falling trend line becomes visible on the chart. In fact, we could soon see price bounce off resistance around it soon.

A closer look at XAU/USD will reveal that the trend line coincides perfectly with the 100 SMA. This indicator has provided the currency pair with support and resistance in the past and who knows, if there are enough sellers in the market XAU/USD may soon hit a new low.

To top it off, using the Fibonacci retracement tool and drawing the top from the most recent high at 1,296.54 to the swing low at 1,257.02, we see that the 61.8% Fibonacci retracement level completes the trifecta of potential resistance levels.

The trend line, 100 SMA and the 61.8% Fibonacci retracement level then make the area around 1,280.00 a strong area of interest for the market. Reversal candlesticks could signal a move lower on XAU/USD. However, a strong break above 1,281.00 could mean that XAU/USD still has room to move higher.

AUD/USD

AUD/USD Forecast for September 9

Although it looks like the Aussie is having a rough start to the week, a quick look at the 4-hour time frame will reveal that AUD/USD has been on a short-term uptrend. This is validated by the rising channel that becomes apparent on the chart when you connect the currency pair’s most recent lows from August 21 to September 3 and its highs from August 19, August 28 and September 5.

The pair failed to find any support on the 100 SMA and 200 SMA. However, it’s possible for price to bounce off support soon at the bottom of the channel. AUD/USD is only a hairsbreadth away from .9280 where it looks to encounter the support level. Will it hold?

Stochastic already indicates that the currency pair is already oversold. But don’t get too excited just yet! The lines have yet to cross each other and bottom out. I would strongly recommend waiting for reversal candlesticks around the area if you plan on going long on the pair. Who knows, we could see a strong break below the bottom of the channel which could be the start of a drop all the way down to lows for May 2014 at .9200.

USD/JPY

USD/JPY Forecast for September 9

Don’t look now but it looks like the dollar could soon run out of steam in its rally against the Japanese yen. There are a few signs on the 1-hour time frame which hint at a potential slowdown on the currency pair.

First, USD/JPY seems to be forming what looks like a head and shoulders pattern. As you can see, price is stalling at its previous high at 105.26 which it hit last September 3. This price action can be considered as bearish as it could mean that there are not enough buyers in the market to take USD/JPY to the higher high at 105.69 where it topped out last September 5.

Also, take notice of the Stochastic. The momentum indicator is hinting that price could soon reverse its tracks as the lines are already in the overbought territory. In fact, there is also a bearish divergence with the indicator making higher highs while price is making lower highs.

Lastly, the area where USD/JPY is currently trading now is the 61.8% Fibonacci retracement level of the swing high at 105.69 to the swing low at 104.63 where it bottomed last Friday.

Reversal candles around the area could mean that we would soon see the currency pair fall, so watch out!