The Bearish Price Action of the USD Is Helping Support Gold

The USDJPY appears to be resuming its downtrend.


The US Dollar was bearish against all of its major pairs on Monday. On the U.S. economic data front, Empire Manufacturing declined to 3.7 on month in August (15.0 expected), from 17.2 in July. 

On Tuesday, Housing Starts for July are expected to increase to 1,240K on month, from 1,186K in June.  

The Euro was bearish against most of its major pairs with the exception of the NZD, GBP and USD. In Europe, no major economic data was released.

The Australian dollar was bullish against all of its major pairs.

Gold jumped $39.94 (+2.05%) to $1985.06.

VIX index declined 0.7pt (-3.17%) to 21.35.

The USD/JPY dropped 59 pips to 106.00 in Monday's trading session. The currency pair appears to have just broken to the downside of a short-term ascending wedge pattern that began to form on July 31st. The overall trend of the pair remains bearish and will likely continue to fall to 105.30 as long as price action remains below 107.05. 

Source: GAIN Capital, TradingView

More from USD

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account