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Dollar Resumed Down Trend, Pound Still Awaiting Brexit Trade Talks

Dollar’s broad based down trend resumption was a major theme last week. Though, Canadian Dollar was the worst performing one, as it digested recent oil price supported rally. Overall risk appetite, with NASDAQ extending record run, kept Yen and Swiss Franc soft too.

As Brexit trade negotiations went into an extra mile, Sterling reversed some of prior week’s losses and ended as the strongest one. Though, at the time of writing, there is no conclusion yet. Fishing right is seen as the last major roadblock, after the UK made concessions on level playing field. We’ll see if the talks would finally be wrapped up by the end of Sunday.

Dollar index broke 90 as down trend reaccelerated

Dollar index’s down trend continued last week and has finally breached 90 handle to as low as 89.73. Daily MACD suggests that the index is picking up downside momentum again. Near term outlook will remain bearish as long as 91.23 resistance holds. Further fall would be seen to next key support zone, between 88.25 and 61.8% projection of 102.99 to 91.74 from 94.74 at 87.88. We’d expect strong support from there to finally bring a another sustainable rebound.

Gold to target 1965.50 as rebound resumed

The selloff in Dollar was accompanied by rally resumption in Gold. The strong break of 55 day EMA re-affirmed the case that consolidation pattern from 2075.18 has completed with three waves down to 1764.31, just ahead of 55 week EMA. Further rally will now remain in favor as long as 1819.05 support holds. Next focus is 1965.50/2075.18 resistance zone. Strong resistance might be seen there to limit upside at first attempt, following Dollar index’s rebound from the above mentioned support zone. However, if Dollar index does break through 87.88/88.25, that will likely push Gold through 2075.18 high to resume the long term up trend. We might know in Q1.

DOW still struggling to break through 30340 projection

Nevertheless, the development will be heavily dependent on overall ri