EUR/USD, Gold, DAX and RUSSELL 2000 Forecasts – Multiple Markets Testing Important Levels

EUR/USD Technical Analysis

The Euro has pulled back just a bit in early trading on Friday and what I am watching at the moment is whether or not this area between 1.18 and 1.1850 holds as support. If it does and we bounce, I think at that point in time it gives us a real shot at hitting 1.23 based on the measured move.

The European Central Bank is considered to be flat right now. It is not really going to make any big moves, and the Federal Reserve, in theory, should be cutting rates a couple of times this year, although those rate cuts keep getting pushed back. So we will see how that plays out. This is also a risk appetite thing to a point, and therefore, after this breakout, the question is, does it have any legs to continue? I think we will find out in the next couple of days. I am watching this area very closely. A bit of a bounce from there, I would be interested in getting long at least for a short-term trade.

Gold Technical Analysis

Full disclosure on Friday, I will not be making a trade in the Gold market, but what I will be doing is watching it very closely because it will be interesting to see if we can close above $5,000. If you are bullish, you want to see at least that, and preferably you would like to see a move back above $5,200. If we close above $5,000 then it suggests that maybe there is enough support here that we can grind sideways for a while and then try to continue the uptrend.

If we close below $5,000, I think that signifies that we are in fact going to see a deeper correction which could be down to the $4,800 level, possibly even $4,600, offering value though. That is the important thing. This is not a short setup. This is a setup where you determine whether or not you are going to buy this dip or maybe get a little bit better price. A little bit of patience will go a long way in the Gold market.

DAX Technical Analysis

I have mentioned the DAX multiple times this week. It keeps playing around the 24,500 level. What I want to see is a recapture of the 50-day EMA. At that point in time I think it might be getting ready to bounce. A small position might be warranted here.

The German government, of course, is throwing a ton of money at the economy with fiscal stimulus, which is something Germany never does, and that is good for stocks. But at the same time, we have the problem with the US tariffs and a lot of the tensions on some of the massive multinationals in this index. I do favor the upside. I do think eventually that will happen. I just want to see a little bit of momentum before I get involved.

RUSSELL 2000 Technical Analysis

Finally, here is a stock index that you do not typically pay attention to. This is the Russell 2000. This is small-cap stocks in the United States, and right now, the 2,600 level seems to be a massive support level, and I am watching that because if that holds and bounces, even if you do not play the Russell, that is a good sign for the other indices.

The 50-day EMA is right there as well, and as you can see, Russell has been very healthy with the exception of last week and a half or so, as we had rallied right along with everything else. While the NASDAQ is getting all the headlines, Russell is doing a bang-up job as well. Again, if you do not typically trade the Russell, that is fine, but it is a good indicator for other indices. If we stay above 2,600, maybe get a little bit of momentum here, I expect a lot of momentum in some of the other bigger indices, such as the NASDAQ 100, the S&P 500, etc.

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