The market is back in risk ON mode. Traders all over the world are putting their money into safe haven assets and fleeing from risky ones. Let’s take a look at some possible reasons. Trade wars? Argentina? Hong Kong? Political crisis in Italy? To be honest, if the market is declining because of Argentina, something is seriously wrong. It would mean that sentiment is very fragile, and if such an irrelevant thing can hurt traders, the bigger, more significant events will kill them.
Gold is having a great time at the moment, but we’ve just reached a crucial resistance. This is the combination of a horizontal and dynamic resistance. This doesn’t mean a reversal is imminent, but it’s definitely a good place at least for a bearish correction. You’ll need much more than this if you’re planning to go short, no less an actual drop in the price. As for now, the bulls are in control here on every single timeframe.
Another important commodity; Brent oil, is going the opposite direction. The price broke the lower line of the symmetrical triangle and the horizontal support at 59.6 USD/bbl. We have been in a bullish correction since the 7th of August, but yes, this is just a correction. The price shouldn’t rise above the blue area and it seems we’re currently set for another downward leg.
Now, on to NZDUSD, where the pair is coming back to the movement created by the interest rate cut, i.e. a downswing. For a few days, traders were correcting the initial drop but the downwards trend line was defended, showing the determination from the bearish side. As long as we stay below the red line and actually make lower lows and highs, the sentiment remains negative.