Correction on the USD. Reversal on Gold!

Buyers on the EURUSD finally can catch a breath after a huge decline that rocked the market at the beginning of October. Sellers are taking a break and buyers are licking the wounds. The price bounced from the 1.153 support, which proved to be crucial for both sides of the market. Is the decline over? We do not think so. For us, this rise is not a reversal but just the correction. In our opinion, we will see another leg down soon.

GBPUSD has this bearish sentiment shown even better. Here, the current rise is shaped like a typical correction, the smallest of out the recent three. That should result with a further drop. Short positions on the Cable seem safe.

The important thing happened in Gold. XAUUSD reversed creating a false breakout pattern. What is important is that this rise is happening with a stronger USD, which shows us that we may be experiencing a shift in the precious metals perception. Buy signal will be triggered, when the price will break the green resistance, which was stopping the price for the past few weeks.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis