Pre-FOMC Tantrum – Inter Market Analysis

Dollar Index

Daily

4 hour

Dollar index has been very technical of late – bulls are busy giving up grounds cautiously – with end of the year book squaring as well as positioning ahead of FOMC imminent rate hike. The market is expecting Yellen to deliver but remain ultra dovish – a two headed approach that could lead to a rather volatile market.

Euro

Daily

4 hour

An inside day in the daily chart while the 4 hour is showing an early RSI divergence – though it remains bullish as support at 1.078 saw buyers / short covering resume. Only a significant break below 1.089 will kick off another round of selling pressure. Will be watching the dollar index for the next set of clues.

Sterling

Daily

4 hour

We will now add sterling on our watch list. Fundamentally, a stronger pound is possible but recent economic data and warning from the IMF left a stale taste. A retest lower to the blue zone is a potential buy area for a short term bounce.

Gold

Daily

4 hour

Gold look set to retest previous low or could even take it out once and for all. Should we see lower prices, the RSI divergence could strengthen – despite that, prevailing weakness remains on a weaker dollar. Lack of interest is showing here but we are wary of a dump and pump scenario post FOMC.

Silver

Daily

4 hour

Weakness continue to set in – the short term bounce was a dead cat bounce while risk to the downside remains. Only a clear break above 14.20 could kick start the next leg higher to take out previous higher – otherwise, a new low is certainly possible.

 

 

 

 

 

 

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