USD Drifting, Gold Gleams, Oil Blazes - Monday's Outlook

Hello, everyone. As of January 15, 2024, the forex market presents various opportunities and challenges. Today's discussion will focus on the technical aspects of the market, maintaining a neutral and informative stance.

Friday's Market Recap

Gold and Crude Oil Dynamics

Last Friday, both gold and crude oil experienced significant movements. Gold saw a substantial rise, with positions entered around 2040l, and crude oil also witnessed a breakout to new highs. These movements were influenced by local factors and the typical Friday effect.

Today's Market Outlook

US Dollar Index

The US dollar is currently in a consolidation phase, lacking a clear direction. The trend analysis suggests a higher probability of a downward movement post-consolidation. Therefore, the perspective on the US dollar is bearish, with potential short positions around the 102.5 level.

Gold's Upward Trend

Gold has shown a significant rise since the morning. The daily chart indicates a clear upward trend. The pattern involves pullbacks, consolidations, and clear upward movements. The current upward trend has already been established. The key focus is whether gold can surpass the previous high around 2080. The short-term outlook is bullish, with potential targets at 2080 or even 2100, and a strategy to buy on dips, particularly around 2045.

Crude Oil Analysis

Crude oil experienced a high followed by a retracement on Friday. The trend analysis reveals a slight bias towards further upside movement. The current trend can be interpreted in two ways: a bullish or a bearish pattern. It's essential not to judge solely based on the appearance of a bullish candle, as there's a phenomenon known as the "hanging man," which may not necessarily indicate a downtrend.

Despite the possibility of a deeper pullback, the overall outlook suggests a continuation of the upward trend, with the potential to challenge the previous high.

The strategy is to consider buying on a pullback around 71.8, acknowledging the potential for further upward movement.

Euro (EUR) and British Pound (GBP)

The Euro is showing signs of consolidation with a potential for upward movement. This morning, the Euro initiated an upward rebound from its current position. If there's a further decline later today, the probability of another rebound to the upside diminishes.

There are two likely scenarios for the afternoon. First, the Euro may experience a minor pullback, finding support slightly higher than the previous position and then proceeding upward. The second scenario involves a breakthrough to the downside, followed by a subsequent upward movement.

The third scenario, where it would retrace to the current position before going upward again, is deemed less probable, as it lacks structural significance.

The current strategy is to buy on dips around 1.093.

The British Pound is displaying robustness, especially on the daily chart. The GBP has been consolidating at these higher levels for an extended period. In the daily timeframe, this consolidation is noteworthy. If there's a breakthrough at this level, it could signify a significant opening in the upside space. Buying on a pullback around 1.273 is being considered.

Summary of Today's Strategies

• US Dollar (USD): Bearish, with consideration of shorting around 102.55.
• Gold (XAU/USD): Bullish, with potential entry points around 2045.
• Crude Oil (WTI): Bullish, considering buying on a pullback around 71.8.
• Euro (EUR): Bullish, considering buying on a pullback around 1.093.
• British Pound (GBP): Bullish, considering buying on a pullback around 1.273.

Additional Considerations

Market Volatility and External Factors

With today being Martin Luther King Day, there might be early market closures in the Euro and US markets, which could impact market volatility. It's essential to approach the market with a cautious and informed mindset.

Conclusion

As we navigate the complexities of today's forex market, it's crucial to stay informed and adapt to changing market conditions. Wishing everyone a successful trading day.

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