The European markets were the ones to watch this week as the ECB announced its latest monetary policy outlook. The ECB remained dovish as we expected which sent the Euro lower however that sentiment didn’t last long as the US President Donald Trump jumped on twitter to send the USD lower pushing EURUSD prices higher.
The GDP data out of the UK continued to paint a positive picture of the economy with a growth of 0.3% from the previous month. The GBP continued to gain strength off of the back of this with GBPUSD notably breaking above the 1.2400 level.
The USD Index shows the extremes the USD went to this week, the price fell beyond the weekly lows before recovering and breaking above the resistance at $99.00 after the ECB press conference. This was overturned quickly, and the price fell showing a rejection of the level again. The USD consolidation looks set to continue unless Donald Trump continues to try and devalue the currency.
EURUSD almost broke out of the weekly channel and the key resistance of 1.1110 after re-testing the swing lows. EURUSD bulls will have to wait as price looks likely to reject the resistance once again.
AUDUSD stayed quiet this week suggesting some retracements to come over the next week or so. A pullback is likely with minor support at the previous daily highs.
USDCAD found support around 1.3150 despite the bearish engulfing candle last week. The pullback was likely after such a significant fall the previous week, now price is back re-testing the daily double top low we expect USDCAD to continue its path lower.
In the market outlook last week, we looked at Brent Crude Oil as we expected the price to break out of the channel if the USD weakened. With the swings in the USD Brent Crude Oil remained within the channel range closing bearish highlighting the technical analysis not lining up with our bias currently.
Gold continued lower this week and ignored the USD weakness as expected. The commitment of trader reports showed Gold short contracts at all-time highs giving us our short bias. Price rallied into the double top neckline and rejected showing us the sellers are active.
The SPX500 continued to push higher working within the channel, price is heading back towards the all-time highs which investors will be watching closely for with a break or bounce. History suggests we could see a breakout higher and if price closes above the current all-time highs we could expect a stock market breakout.