Technical Analysis for Gold & Oil Prices, S&P 500, DAX 30

Gold continues to stay in a very narrow range, building towards a breakout while WTI crude oil prices continue to march on higher towards the summer peak. The S&P 500 is hanging out in record territory and continues to receive the benefit of the doubt for higher prices. The DAX has resistance to contend with but supportive risk sentiment.

TECHNICAL HIGHLIGHTS:

• Gold price range continues to put a stranglehold on outlook
• Crude oil has eyes for gains to July highs (or better)
• S&P 500 hanging out in record territory, receives benefit of the doubt
• DAX runs into confluent resistance, but has supportive risk trends

• GOLD PRICE RANGE CONTINUES TO PUT A STRANGLEHOLD ON OUTLOOK

  It’s been a brutally tight range this month, and should it hold through the end of the week it will be the smallest since 1996. This has sidelined traders from having an edge, but the good news is the narrow range, whether it remains through month-end or not, won’t last forever and is likely to lead to a sizable move one resolved. The upside is still favored after the capitulation move last month, but we’ll reserve our outlook until a direction becomes apparent.

FOMC KICKS OFF TODAY, SEPTEMBER RATE DECISION ANNOUNCED AT 2PM TOMORROW

Today marks the start of the two-day meeting in Washington DC in which the Federal Reserve will decide upon the September interest rate decision at the bank. It doesn’t even really appear as though there are many decisions to be made here, as markets have carried an expectation for a 25 basis point rate hike for some time. What is perhaps up to greater debate, however, is December and whether or not the Fed can get in a fourth rate hike in 2018. But – there is time for that decision, and the big question as we go into tomorrow is how strongly the Fed may signal future interest rate hikes, how close we are to the neutral rate, and whether-or-not the bank is confident enough in the current economic backdrop to continue their pace of gradual tightening into 2019.

Tomorrow will bring a dot plot matrix as part of an updated set of projections and this, combined with what Mr. Jerome Powell says during the accompanying press conference, will likely be the key drivers around the US Dollar for tomorrow’s meeting.

The US Dollar continues to struggle as FOMC kicks off; and with just a few days left until the end of the quarter, it looks like this three-month-period will finish with a loss for the Greenback as we opened the quarter at 94.63. This comes after an aggressive rally in April and May, with bullish enthusiasm holding for the first-half of Q3. But, at the quarter’s mid-point on August 15th, the music suddenly stopped, bears took over – and have largely been in-control ever since.

EUR/USD, GBP/USD Bounce from Chart Support Ahead of FOMC

- Today marks the start of the two-day meeting at the Federal Reserve in which the bank will decide upon the September interest rate decision. A 25 basis point hike here is almost a foregone conclusion, and this appears to be already baked into current prices. The bigger question is how confident the Fed will appear to be towards a December rate hike and how hawkish they may be as we turn the page into 2019.

- Both EUR/USD and GBP/USD continue to exhibit varying forms of strength as the US Dollar remains weak. Meanwhile, Yen weakness remains even more prominent than USD-weakness, and this keeps the door open for bullish strategies in pairs like EUR/JPY and GBP/JPY.