European Open: Gold Considers Its Latest Breakout

A weak NFP print resulted in a weaker dollar and stronger gold prices. Now consolidating beneath the July high, it shows the potential for another breakout.

Charts (2)

Asian Indices:

  • Australia's ASX 200 index fell by -31.5 points (-0.42%) and currently trades at 7,491.40
  • Japan's Nikkei 225 index has risen by 243.84 points (1.75%) and currently trades at 29,638.17
  • Hong Kong's Hang Seng index has risen by 149.01 points (0.58%) and currently trades at 26,051.00

UK and Europe:

  • UK's FTSE 100 futures are currently down -1 points (-0.01%), the cash market is currently estimated to open at 7,137.35
  • Euro STOXX 50 futures are currently down -0.5 points (-0.01%), the cash market is currently estimated to open at 4,201.48
  • Germany's DAX futures are currently down -11 points (-0.07%), the cash market is currently estimated to open at 15,770.20

US Futures:

  • DJI futures are currently down -74.71 points (-0.21%)
  • S&P 500 futures are currently up 6.75 points (0.04%)
  • Nasdaq 100 futures are currently down -4 points (-0.09%)


Indices

The US dollar index (DXY) closed below its 200-day eMA on Friday, although prices are trying to get back above it at the time of writing. With no major economic data scheduled for today we could be in for a quiet couple of session, and that may also allow DXY to continue retracing higher. Yet when that peters out our bearish target around the 91.78 low remains intact.

EUR/USD is showing signs of weakness after hitting our 1.1900 target on Friday. A bearish hammer formed and closed back below the 200-day eMA, and a break beneath Friday’s low of 1.1865 confirms the 1-bar reversal pattern to suggest a countertrend move is underway.

AUD/USD retraced overnight and traded back below 74c, although we had anticipated this given it found resistance at tis 200-day eMA on Friday.

USD/CAD fell to a 3-week on Friday in line with our bearish bias. It closed below the 50-day eMA although prices have recovered back above it overnight. We suspect the rise is corrective in nature so if prices can remain beneath the 1.2562/75 resistance zone then we’re anticipating new lows.


FTSE 350: Market Internals

FTSE 350: 4135.18 (-0.36%) 03 September 2021

  • 145 (41.31%) stocks advanced and 188 (53.56%) declined
  • 42 stocks rose to a new 52-week high, 5 fell to new lows
  • 75.5% of stocks closed above their 200-day average
  • 74.93% of stocks closed above their 50-day average
  • 21.65% of stocks closed above their 20-day average

Outperformers:

  • + 21.6%   -  Discoverie Group PLC  (DSCV.L) 
  • + 9.36%   -  Hochschild Mining PLC  (HOCM.L) 
  • + 4.35%   -  Harbour Energy PLC  (HBR.L) 

Underperformers:

  • -4.63%   -  Network International Holdings PLC  (NETW.L) 
  • -4.07%   -  Auction Technology Group PLC  (ATG.L) 
  • -4.07%   -  Ocado Group PLC  (OCDO.L) 

Forex:

The US dollar index (DXY) closed below its 200-day eMA on Friday, although prices are trying to get back above it at the time of writing. With no major economic data scheduled for today we could be in for a quiet couple of session, ad that may also allow DXY to continue retracing higher. Yet when that peters out our bearish target around the 91.78 low remains intact.

EUR/USD is showing signs of weakness after hitting our 1.1900 target on Friday. A bearish hammer formed and closed back below the 200-day eMA, and a break beneath Friday’s low of 1.1865 confirms the 1-bar reversal pattern to suggest a countertrend move is underway.

AUD/USD retraced overnight and traded back below 74c, although we had anticipated this given it found resistance at tis 200-day eMA on Friday.

USD/CAD fell to a 3-week on Friday in line wit our bearish bias. It closed below the 50-day eMA although prices have recovered back above it overnight. We suspect the rise is corrective in nature so if prices can remain beneath the 1.2562/75 resistance zone then we’re anticipating new lows.


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Commodities:

Gold reached our 1834 target on Friday following the weak NFP report, and broke out of a bull flag on the four-hour chart. Prices are now consolidating just below July’s high and forming a potential pennant pattern. Given its bullish trend structure on the four-hour chart and continuation pattern at its highs, we’re now waiting for a break above 1835 to confirm trend continuation. If successful, the flag projects an approximate target around 1859.

WTI has fell to a 2-day low but, as explained in today’s video, we suspect it will eventually break above 70. We just need the current retracement to hold above the 67.12 low.


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