In today’s Market Outlook, let’s take a look at Forex Trading Silver, XAG/USD, EUR/USD, USD/CHF, the NASDAQ, and Gold, XAU/USD.
In general, we see a bearish trend lasting 2 months now, but price action is consolidating into a symmetrical pennant.
Gold surged to an all-time high on January 29, breaking past $5,500 an ounce, driven by escalating Middle East tensions, expectations that the Federal Reserve would keep interest rates on hold, and widespread concerns about US debt and the stability of the dollar.
This type of volatility almost always gives us an opportunity when the panic subsides, and we can trade in the opposite direction for a couple of days.
This peak here was caused by the first attack on Iran by the US, and we had the same opportunity, over and over again.
Typically, throughout history, as a war rages on, investors become less and less worried about it.
Never so much as the initial shock.
The safe-haven requirement for investors is obviously diminishing, as we can see by the NASDAQ, which, again, has reached all-time highs based on the frenzy of AI and tech stocks.
But watch out for the news this week.
Both gold and the NASDAQ may be affected by the news this week, with the ADP Employment Change, a PMI, and the biggest event of the month, the US Non-Farm Payrolls.
As we saw with gold, USD is stronger as of yesterday.
This was caused by at least 3 factors.
Firstly, the US ISM manufacturing PMI was higher than expected, which signals that the Fed will hold off on interest rate cuts for a while.
In the same breath, US bond yields are on the rise again, bolstering USD.
And tensions are rising again between the US and Iran, which is a clear geopolitical risk feeding inflation fears.
If we look at specific USD major pairs, like USDCHF, we see the stochastic oscillator overbought and turning down in the downtrend.
We see the corresponding price action in the opposite direction, where USD is the quote currency.
Price action on EURUSD has reached the lower trend line, with the stochastic oscillator turning up.
We can see where the stochastic oscillator has picked tops and bottoms in price action repeatedly
I encourage you to check other USD pairs on all time frames for opportunities, but watch out for economic events this week.
We will do a recap on Thursday’s video ahead of Friday’s NFPs.
Getting back to precious metals, we see a similar picture to gold on silver, which will also be affected by the USD.
Price action on XAGUSD is also in a symmetrical pennant on the daily chart.
If we consider a bearish bias, take a look at lower time frames like the 1-hour, where we will be watching the upper trend line and our technicals.
