Gold, Euro and Pound are Bearish Against the USD

The argued $1.6 or $2.2 trillion remains in the budget which bolsters the US Dollar Index and results in a 2.20% gain of Nasdaq and 2.24% gain of Dow Jones.

Strong US Dollar gained against major pairs and safe-haven assets like Gold, resulting in a 1.96% loss of value of the Gold. As I’ve said during my previous articles, Gold will continue the uptrend, though there are strong resistances which it should overtake before showing strength for another jump.

One of the major resistances is at $1917 which called a halt to an uptrend continuation of the precious metal and led to a price drop. Another resistance is at $1906, which also supported the downtrend move.

Gold was able to recover the same after Mr. Powell’s speech where he outlined in the FOMC economic projections that the outlook remains ‘uncertain’ and depends on the spread of the virus. While writing of this article XAU/USD on Overbit is traded at $1987, below the MA100 on a 4H chart, though it does signal the bearish short-term move, MACD indicator signals the opposite.

Yet another time $1906 could be a strong resistance and might push the price towards $1874 and below that to $1855. If the dynamic resistance (the lower edge of the tringle) withholds, bulls will try to push the price above the $1917 resistance.

Euro and the British pound are in danger against the US Dollar as the forecasts for the economic data for the next week are unpromising. Britain would like to impose harder restrictions, whereas public places such as restaurants, bars and pubs would be asked to close before 6PM. Average earnings index is expected to drop to another 0.3%, and an employment change data as per August to show a sizeable -125K. For Euro the market will be watching the German ZEW and CPI (MoM) data next week.

There are two patterns to watch on the GBP/USD pair, both being the same formation yet signaling the different price actions – Head and Shoulders and an Inverted Head and Shoulders.

The short-term outlook of the pair projects the retest of the MA100 at 1.28670 and a possible drop towards a major static resistance and a mid-September low at 1.28820.

The long-term projection of the British pound looks more positive, the 1.28820 drop could trigger a trend-reversal and the Pound would form an Inverted Head and Shoulders pattern and climb towards 1.29900 and 1.30600 levels.

Euro is below the MA100 and the MACD signals the downtrend continuation, though is still above the dynamic resistance. Weak data from Germany and EU may result in a drop of the Euro against the US Dollar down to 1.17060 and 1.16780.