• The gold markets have fallen a bit during the day on Monday to drop about two-thirds of a percent in the spot market.
• The market now looks as if it is paying close attention to the $1725 level, an area that was previous resistance.
• This is a market that is going to move counter to the US dollar and interest rates, as is the longer-term trend.

When you see this chart, you can also see that we have been in a long-term downtrend, and it’s worth noting that the US dollar itself is strengthening based on tightening concerns. With the Jackson Hole Symposium going on this week, it does make a certain amount of sense that traders are focusing on the speeches of central bankers. If they are going to continue to tighten monetary policy, that works against gold, due to the fact that the interest rates will be higher, and therefore it’s easier to make a return holding paper than it is storing gold.

See where Gold is headed next

The candlestick for the trading session on Monday is relatively negative, but it’s not necessarily something that I’m overly concerned about. I believe that the market is going to not only pay attention to the $1725 level, and then again at the $1690 level. That’s an area that needs a hold in order for gold to perhaps keep its head above water. If we were to break down below that level, then the market is likely to go looking to much lower levels, with perhaps an eye on the $1500 level.

If we can try to break above the $1770 level, we may make a run toward the $1800 level above, which is a large, round, psychologically significant figure, and an area that we have seen the market pullback from as well. All things being equal, this is a market that has been in a downtrend for a while, and even though we had a nice rally recently, it did not change much. In fact, it’s not until we break above the 200 Day EMA, which is currently hanging around the $1820 level, that I would consider this market to be changing over into a longer-term bullish trend. This is a market that I think will remain noisy, as there are a lot of crosscurrents going on at the same time.

Ready to trade today’s Gold forecast? Here are the best Gold brokers to choose from.

I think the only thing you can count on is seeing a lot of fake-outs in both directions.

• The AUD/USD currency pair has dropped rather heavily to kick off the week on Monday, slamming into the 0.70 level.
• This is an area that I will be watching very closely because it is a large, round, psychologically significant figure, and an area that I think a lot of people will be paying close attention to.
• We have seen a lot of support in that area in the past, right along with resistance.
• “Market memory” comes into play rather drastically in this general vicinity.

Risk Appetite May Cause Bullishness

The size of the candlestick is somewhat impressive, and therefore you need to take that into account. However, this is also a lot of noise underneath here so you also would have to assume that there will be people willing to get involved and try to pick up value in the Aussie if they are truly bullish on risk appetite. One of the main things that kicked this off during the Monday session was the fact that Chinese numbers came in rather lackluster. Retail sales missing by almost 3% does not bring in a lot of confidence when it comes to the Chinese economy. Remember, Australia is highly dependent on the Chinese economy, so if the Chinese economy does poorly, so will the Australian economy.

Underneath, we have the 50-day EMA, and that of course comes into the picture as well, as the market pays close attention to that quite often. The 0.6939 level is where it currently is, so breaking down below that will open up an attack on the 0.69 level, and then possibly breaking down below there to reach the lows again. I don’t know that it will happen easily, but it’s obvious that there is still plenty of volatility in the market, so you have to be very cautious on the whole.

If we were to break above the 200-day EMA, it opens up the possibility of a move above the 0.72 level, an area that has a certain amount of historical importance and of course psychology attached to it as well. Either way, I think the only thing you can count on is seeing a lot of fake-outs in both directions, and a lot of accounts destroyed in this pair as it has bucked the trend when it comes to how it behaves against the US dollar.

Ready to trade our daily Forex forecast? Here’s a list of some of the best Forex trading platforms to check out.

The market is likely to be one in which you need to pay close attention to short-term moves, but still favor the downside overall as the US dollar is by far the strongest currency in the world.

• The GBP/USD currency pair initially tried to rally Monday but gave back the gains rather quickly.
• By doing so, it suggests that the market is going to test the 1.20 level underneath, which is a large, round, psychologically significant number that a lot of people will have to pay close attention to. It is also an area that has seen support previously, so if we were to break down through it, that could kick off even more selling pressure.

UK Recession Likely to Cause Noise

If we were to break down below the 1.20 level, the market is likely to go down to the 1.18 level. The 1.18 level has offered a significant amount of support, so breaking down below there opens up the bottom for the British pound. On the other hand, the market could turn around and try to take out the 1.22 handle. If it does, that would be a very bullish sign, perhaps opening up a move to the 1.23 level. All things being equal, this is a market that I think is going to continue to be noisy, due to the fact that the Bank of England has just stated that the United Kingdom is almost certainly going to head into recession. That is not good obviously, and ironically, so is the United States.

That being said, the market is likely to continue to see a lot of demand for US dollars, especially if they start to jump into the bond market in order to protect trade accounts in what is a very rough economic situation. Ultimately, I think that rallies will continue to be sold into, so it’s difficult to get bullish anytime soon. In fact, it’s not until we break above the 1.26 level that I would think we could get beyond in order to change the trend. If we were to change the trend, then the market could go all the way to the 1.30 level.

The only thing that I think you can count on here is going to be a lot of volatility, but that’s nothing new. With that being said, the market is likely to be one in which you need to pay close attention to short-term moves, but still favor the downside overall as the US dollar is by far the strongest currency in the world.

Ready to trade our daily Forex analysis? We’ve made a list of the best brokers to trade Forex worth using.

You should have plenty of time to accumulate if you are a longer-term investor.

Ethereum rallied just a bit Monday to show signs of life. Breaking above the $1100 level is positive, but one has to wonder whether or not any institutional money was involved, as the Americans were celebrating Independence Day. Because of this, Tuesday may tell the real story, so pay close attention to how the daily candlestick closes.

If we were to break above the $1250 level, that would be very bullish and more likely take this market much higher. In that scenario, I would anticipate an attempt to get back to the $1600 level, perhaps even the $1750 level after that. Anything above there would be a huge bonus, but I just don’t see that happening anytime soon. In fact, I think that once we reach the $1750 level, there would be plenty of people willing to jump out of the market in order to either break even or come close to it.

On a breakdown from here, I would be paying close attention to the $1000 level, and perhaps even more importantly the $900 level. $900 was the recent low, and breaking down below that would more likely than not send even more sellers into the market. In that scenario, the market almost certainly will go down to the $500 level, maybe even $400. It is worth noting that $400 being tested would make a “complete round-trip” of the rally that we have just seen. That is not uncommon for crypto markets, and in the environment we find ourselves in, I do not think there are a lot of people out there willing to throw a ton of money into this market.

That being said, if we get close to the $400 level I will start “stacking”, because the next run higher in crypto should produce even higher highs. In fact, I am actually hoping for this to happen so that I can pick up Ethereum “on the cheap.” In the meantime, short-term rallies are probably thought of as selling opportunities at the first sign of exhaustion, which we should see shortly after a surge higher. As long as the Federal Reserve remains tight with its monetary policy, there’s no real argument for this market going higher over the longer term. You should have plenty of time to accumulate if you are a longer-term investor.

The financial markets are a bit of a mess these days, and gold will reflect that right along with everything else.

Gold markets initially tried to rally on Monday but gave back gains to show signs of weakness yet again. Ultimately, the market is likely to continue to see a lot of volatility and negativity. The gold markets giving up gains near the $1840 level suggests that we could go to the bottom of the overall consolidation area, which is at the $1800 level.

The 200-day EMA is sitting just above the $1850 level and going sideways. That suggests that the market is currently looking for some type of bottom, and the $1800 level could be a huge area. The $1800 level is not only a large, round, psychologically important number, but it is also an area that has seen action in the past, so I do think that it is crucial. If we were to break down below the $1800 level, it’s likely that we go down to the $1750 level rather quickly.

If we were to break above the $1850 level, it’s likely that we could go to the $1880 level. The $1880 level is an area that has been resistant more than once, so I do think that it is probably going to be crucial if we do break above there and will more likely than not send the market much higher. At that point, the market is likely to see an attempt to get back to the $2000 level, which obviously would attract a lot of attention, which could bring in more money.

The interest rates in the United States will continue to have a major influence on where the gold market will go next. Ultimately, I think the only thing you can count on here is a lot of volatility, and that being said, the market is going to see swings in both directions, so you need to be very cautious with your position size, and perhaps focus on short-term charts more than anything else. After all, the financial markets are a bit of a mess these days, and gold will reflect that right along with everything else. The US dollar has a negative influence on the gold markets as well, so pay attention to the US Dollar Index. The candlestick for the day suggests more weakness than strength, so you should probably keep that in mind.

More often than not, pullbacks will be thought of as buying opportunities, as there are plenty of value hunters out there willing to jump on this market that is so obviously bullish.

The West Texas Intermediate Crude Oil market pulled back just a bit on Monday to start off the week on the back foot. That being said, the market is still very bullish and there are plenty of buyers underneath willing to get involved. The market may have been a little bit overbought, and it appears that a certain amount of psychology comes into play at the $120 level.

Looking just below, the $115 level was the beginning of the top of the ascending triangle that we have just broken out of. I anticipate that there should be plenty of buyers in that region and that they will be more than willing to get involved if we do in fact pull back that far. I don’t know that we will, but it is something worth watching as it could very well be a nice buying opportunity.

Crude oil markets will continue to get a lift as long as the war in Ukraine continues, and perhaps more importantly, sanctions against Russian oil. While the Russians are most certainly selling oil to other places such as India and China, it does not affect the global market in the same way, because the swaps being done with those countries are more of a direct situation than out on the open market.

Regardless, you should also keep in the back of your mind that inflation typically means higher energy prices, so traders may just be playing that correlation as well. The market has been grinding higher for quite some time, and there’s not much to keep it from going to the recent highs, closer to the $130 level. Underneath, I see the 50-day EMA as a major support level, and if the market can stay above there, then it’s likely that there will be plenty of buyers involved given enough time. I don’t necessarily think we are looking at the situation where we even think about testing that, but that could be your “line in the sand” if you are trading this market right now. More often than not, pullbacks will be thought of as buying opportunities, as there are plenty of value hunters out there willing to jump on this market that is so obviously bullish. Oil remains a very strong market.

The fact that we are closing towards the top of the range for the day does suggest that perhaps we have a little further to go before the weight of the overall trend exerts itself yet again.

The euro rallied quite a bit on Monday, breaking above the 1.06 level. Ultimately, the market has seen a lot of upward momentum during the trading session on Monday, but it is a countertrend rally to say the least. After all, the euro is going to continue to struggle against the greenback based on the fundamentals and momentum more than anything else. Ultimately, this market will continue to be noisy, but it is coming from a major oversold level, so a bounce like this does make a certain amount of sense.

That being said, the 50-day EMA sits just above and is causing quite a bit of potential resistance. The market has been very violent to the upside during the trading session, based upon comments coming from Christine Lagarde suggesting that the ECB could raise interest rates by 25 basis points. That being said, there is still a huge difference between the two central banks, and this short-term rally could be an opportunity to start selling again as the US dollar should be stronger than the euro.

Even if we were to continue rallying from here, the 1.08 level should be significant resistance, as it had been significant support previously. “Market memory” should come into the picture and I think a lot of traders will be looking to get involved in that area, assuming that we can even get that aggressive to the upside.

On the downside, if we were to break down below the 1.05 level, it is likely that we would see the euro continue to meltdown. After all, even though we have seen such a significant move over the last 24 hours, it is still a market that has been extraordinarily negative for quite a while, and these things do not change overnight. If the Federal Reserve was to change its tune, that would obviously change a lot of things here, but at this point, the US dollar is still the favored currency, despite the fact that we may get the occasional rip to the upside as we have. The fact that we are closing towards the top of the range for the day does suggest that perhaps we have a little further to go before the weight of the overall trend exerts itself yet again.

There are a slew of earnings this week that could also come into the picture and cause a few headaches along the way.

The S&P 500 did very little on Monday as we have run out of momentum. That being said, the market looks as if it is trying to figure out what to do next, after that massive recovery on Friday. Because of this, I think the market will ultimately have to figure out what it wants to do based upon risk appetite, but it is worth noting that after that massive move higher on Friday, the markets did not do much. Because of this, I anticipate that we are going to continue to see a bit of negativity, due to the fact that we could not get any follow-through on the rally. Furthermore, not much has changed and I think that a lot of what we had seen on Friday was more or less going to be profit-taking.

If we break down below the bottom of the candlestick for the trading session on Monday, then it is likely that we will continue to see this market be noisy, as the economic outlook for the entire world, let alone the United States, is shady at best. There are lots of concerns about inflation, supply chain issues, and geopolitics. At this point, I think you will continue to fade rallies as they show signs of exhaustion and give you an opportunity to do so. The market breaking down below the bottom of the candlestick for the day would show a continuation of the overall trend, but you could also point out that we have tried to rally multiple times in a row, and that does suggest that at least there are some buyers out there trying to turn things around. I would not hold my breath at this point, but clearly there is a significant amount of effort at least being thrown at the market. It is also worth noting that we are hanging about the 4000 level, which is psychologically important, but whether or not it holds as structurally important is a different question. Above current trading we have the 4100 level offering structural resistance that extends to the 4150 level. That being said, it is not until we break above all of that that you can even begin to suggest that you should be a buyer of this market. There are a slew of earnings this week that could also come into the picture and cause a few headaches along the way.

At this point, we are likely in the “do or die” area that we need to pay close attention to. 

Ethereum has lost 15%, or $400, to kick off the Monday session. The $2300 level is an area where we are starting to see buyers try to pick the market up in the past, so it will be interesting to see if they can do it now. The fact that we are closing at the very bottom of this candlestick dictates that we are more likely than not going to continue to see downward pressure. At that point, the market is likely to go looking to reach the $2000 level.

The $2000 level is a major round figure that a lot of people will pay close attention to, and will cause quite a bit of headline risks. The $2000 level being broken would open up the trapdoor to much lower pricing, and I think we could eventually enter what is typically called “crypto winter.” In that scenario, the market is likely to see a lot of acceleration, and therefore a massive unwinding of long positions.

It is interesting to see that we have given up so much during the day and the fact that we have formed such a huge candlestick does suggest that there are going to be plenty of people jumping ship. You need to pay attention to the fact that a lot of institutions have gotten involved in Ethereum and are taking massive losses not only in this market but in other markets as well. When we have losses across-the-board, a lot of times these larger funds will have to liquidate almost anything and everything they can get their hands on. At that point, it is about trying to find bits and pieces of liquidity.

It is also worth noting that Bitcoin was absolutely annihilated during the day as well, and it certainly looks as if we are getting relatively close to kicking off another “crypto winter.” If you are a longer-term investor, you should get an opportunity to pick up crypto at a much cheaper price, not just Ethereum. At this point, we are likely in the “do or die” area that we need to pay close attention to. Rallies at this point will more than likely offer a significant amount of resistance that we can sell into, but I do not have any interest in trying to get long of Ethereum at the moment.

At this point, the market is likely to continue its downward trajectory.

Monero got eviscerated on Monday to show signs of extreme weakness, as the 50-day EMA has offered a bit too much in the way of resistance. Further backing up the 50-day EMA is also the 200-day EMA, both going sideways and showing signs of hesitation. At this point, the market forming the big red candlestick that we have suggests that we are going to continue to go lower.

It should be noted that Bitcoin got hammered, and this has a major knock-on effect when it comes to smaller coins like Monero. The crypto markets in general are in a lot of trouble, and with the strengthening US dollar, we will likely continue to see this happen. The pair of course is quoted in US dollars, so as the US dollar gets stronger, it will take less of them to buy one unit of Monero. Monero and other smaller coins like this have no real shot at appreciating until Bitcoin and Ethereum can turn it around. As things stand right now, they look like they are ready to fall further, which will translate into lower altcoin pricing.

It also is worth noting that the $220 level has offered quite a bit of resistance, as there has been a lot of noise in that general vicinity. If we can break above there, then we may go much higher, but that would take a Herculean effort and exterior influence from Bitcoin. It probably is going to take a couple of good days for the larger coins to make this thing turn around because people will have to feel comfortable stepping further out into the risk spectrum. Monero is pretty far out there, so we would need to see a lot of money come into the crypto markets to think that Monero will pick up.

If we break down below the $180 level, it is likely that we will go looking to reach the $150 level. At this point, the market is likely to continue its downward trajectory, and I think if there is any type of rally, it will more than likely show signs of exhaustion that you can start shorting again. If you are a longer-term believer in Monero, you probably have an opportunity to pick it up at much lower prices.