A strengthening US dollar could be one of the major downfalls for this market as well, and of course risk appetite in general is a very fluid situation overall.

• The Ethereum market struggled a bit Monday as we continue to see the $1800 level above offer quite a bit of resistance.
• The market looks as if it is more likely than not topping out for the short term, as Ethereum got a little bit ahead of itself.

The $1800 level has been imported a couple of times and certainly offers quite a bit of supply. You can see that we shot straight up in the air to reach the $1800 level, and then have pulled back in more of a grind lower. At this point, you have to ask yourself the simple question: “Which one of these is more likely to be more sustainable?”

Economic Impact

Ethereum has gotten a bit of a boost due to the idea that upgrades are coming by September, but we have been disappointed by Ethereum more than once. Quite frankly, as long as there’s a lot of concern out there when it comes to the economic outlook, that has a lot to do with what happens with crypto. Remember that crypto is far out on the risk spectrum, so we need to see a lot of money flowing into the “hot markets” that make up the crypto world.

The 50-day EMA sits just above the $1200 level and is starting to curl higher. It’s sitting on top of the previous consolidation area, so I do think that the 50-day EMA could come into the picture to offer support. If we were to break down below there, then it’s likely that Ethereum will test the lows. On the other hand, if the market were to break above the $2000 level, it’s possible that we could go much higher. At that point, if the market were to break above the $2000 level, it would be a major shift in this market, perhaps opening up the possibility of a longer-term bullish run. That being said, I don’t necessarily think that’s going to be easy to happen, but it is something that we need to keep in the back of our mind. A strengthening US dollar could be one of the major downfalls for this market as well, and of course risk appetite in general is a very fluid situation overall.

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Gold futures snapped a four-day losing streak and settled slightly higher at the end of last week’s trading, as the US dollar gave up some of its strength. Treasury yields fell amid a slight decline in inflation concerns. The price of gold XAU/USD today around the level of 1837 dollars an ounce and the selling operations last week pushed it towards the support level of 1817 dollars an ounce.

On the economic front, data from the Commerce Department showed a significant recovery in US new home sales in May. The report showed new home sales rose 10.7% to an annual rate of 696,000 in May after declining 12% to an upwardly revised 629,000 in April. The surprise rise surprised economists who had expected US new home sales to decline 0.5 percent to an annual rate of 588 thousand from 591 thousand originally reported for the previous month.

Meanwhile, a separate report from the University of Michigan showed that US consumer confidence fell slightly more than initially expected in June. The report showed that the Consumer Confidence Index for June was revised down to 50.0 from an initial reading of 50.2. The Consumer Confidence Index fell sharply from the final reading for May of 58.4, falling to an all-time low. The sharp decline in the headline index came as the current economic conditions index fell to 53.8 in June from 53.3 in May, while the consumer expectations index fell to 47.5 from 55.2.

Today’s XAU/USD Gold Forecast:

Despite today’s recovery, however, the price of gold is subjected to downward pressure, and I still prefer to buy XAU/USD gold from every bearish level. The ongoing and increasing global geopolitical tensions still support the opportunity to buy gold in the end. The closest buying levels most appropriate to the last performance are 1817, 1800 and 1785 dollars, respectively. On the other hand, the price of gold may come out of the control of the last bears if it returns to move towards the resistance levels of 1855 and 1877 dollars, respectively.

The price of gold will be affected today by the price of the US dollar and the extent of investors’ appetite for risk or not, as well as the reaction from global central banks’ signals towards the future of tightening their monetary policy.

It’s only a matter of time before something ugly happens to cause more selling and panic in the markets overall.

Gold markets initially tried to rally on Tuesday but then turned around to show scenes of exhaustion yet again. As long as interest rates continue to be very strong in the United States, it puts a bit of a drag on the gold market. Furthermore, there’s a lot of concern out there about getting liquid, and some traders will sell gold in order to pay for other positions that they are suddenly in trouble with.

From a technical analysis standpoint, we are threatening a major support level in the form of an uptrend line, and of course the $1800 level was right here as well. In other words, there are a couple of different reasons to think that perhaps buyers may show up in this general vicinity. If we were to break down here, then it’s likely that the market will open up into a new flood of selling, possibly sending this market down to the $1750 level. When you look at this chart, it’s obvious that we are trying to break through this support level, and I do think that we have further to go. In fact, we have formed a massive “H pattern”, which is generally a very bad sign.

If we get a breakdown at this point, it’s likely that it will be rather ugly. On the other hand, if we were to turn around and show signs of bullish pressure, then it’s not until we break above the $1880 level that we could see any real follow-through. There is the possibility that we bounce here to stay in the overall range, and right now we have not managed to break down, but really at this point, one would have to think that it’s only a matter of time before something ugly happens to cause more selling and panic in the markets overall.

If we were to turn around and break above the 50-day EMA, it’s possible that we could take off to reach the $1920 level, followed by the $2000 level, but that seems to be very unlikely. Ultimately, we would need to see a massive change in the interest rate markets, which at this point does not look to be very likely. I believe it is a scenario where we will continue to see sellers come in on rallies.

We are in a downtrend, and that has not changed.

The euro fell a bit on Wednesday as the euro ran out of momentum. Having said that, the market has found enough support underneath to at least attempt a recovery. The 50-day EMA offered resistance, just as it has multiple times in the past. Whether or not we can break above there is a completely different situation and the 1.08 level above is also a major barrier. If we were to break above that level, then it’s possible that we could go a bit higher but right now there is a lot out there that could cause major issues when it comes to risk appetite.

You need to pay attention to the bond market in the United States because the interest rates have dropped a bit, so that may provide a little bit more negativity to the US dollar. At this point, the 1.08 level is where everything will be decided for the longer term. In that scenario, I think we have a situation where the market could take off to the upside for a much bigger move, perhaps reaching the 1.12 level. That being said, it would take quite a bit of momentum to make that happen, so I’m not necessarily thinking this is a situation where you would anticipate a lot of clarity. At the very least, you are probably going to be looking at a situation where traders will have to deal with a lot of volatility, something that’s getting worse in most markets.

If we break down below the bottom of the candlestick for the trading session on Wednesday, that opens up a move back down to the 1.05 level, where I would anticipate seeing a significant amount of support based upon “market memory” and where we had seen resistance. If we break down below the 1.05 level, then the market is likely to go looking even lower to the 1.04 level. We are in a downtrend, and that has not changed. However, we do not have enough exhaustion to start shorting. If we break above the 1.09 level, then it’s likely that we will continue even higher, but it’s going to come down to the bond market and interest rate expectations more than anything else.

This is a market that will continue to fade rallies and push lower.

The euro initially tried to rally on Friday but gave back gains to show signs of hesitation. The 1.06 level continues to be a massive barrier that traders cannot get beyond, and even if we did break above there, it is likely that we will find plenty of reasons to short this market.

If we can break above the 1.06 level, then it is likely that we will go looking to reach the 50-day EMA. After that, the 1.08 level would be massive resistance as it was significant support previously. The “market memory” attached to this level will attract a lot of attention. That being said, I do not think that we will go that high in the euro, as there are plenty of reasons to believe this market will continue to drop.

The overall downtrend continues to be strong, and I think will accelerate given enough time. After all, the European Central Bank is in no position to tighten monetary policy, especially as we are already starting to see signs of a potential German recession. Because of this, I think that it is only a matter of time before the euro falls, due to the fact that the ECB will have to keep monetary policy loose for quite some time.

The 1.05 level would attract a certain amount of attention, as it had previously been supported. However, if we break down below there it is likely that the euro will go looking to the lows again, near the 1.0350 level. If we break down below there, then it is likely that we will continue to go much lower, based upon the overall trend and the bearish flag that we had formed previously. In fact, we are retesting this area, so one has to take a look at that as a potential reason to short the market as well.

Based on the “measured move” of the bearish flag, it is likely that we will go looking to the 1.01 level. After that, we could go looking to the parity level. This is a market that will continue to fade rallies and push lower, especially as Jerome Powell has made it abundantly clear that the Federal Reserve is perfectly fine with the markets being broken, meaning that they will stay tight for quite some time.

There are so many problems around the world right now that is difficult to bet against the US dollar, but then again, at the same time it is difficult to bet against commodities.

The Australian dollar went back and forth on Monday, struggling with the 0.75 level yet again. This is an area that has been difficult to overcome, and as a result, it would not be a huge surprise to see a little bit of a pullback. The shape of the candlestick is somewhat neutral, but it is worth noting that we have had a significant move in both directions, meaning that there is a lot of volatility.

If we break down below the bottom of the candlestick, then I think it is possible that we go looking towards the 0.74 handle underneath. That is an area that has been resistance previously, so I do think that it could end up being support on a pullback. On the other hand, if we were to break above the top of the candlestick, we could go looking towards the 0.76 level above. At that point, I would anticipate that the Australian dollar would go much higher, as it will have been completely broken out.

We are currently at an area that has been very difficult more than once, so I think we are entering a potentially choppy part of the chart, at least until we make a bigger move. If we do get an impulsive candlestick, then it is possible that we could follow that, but until then I think we have a significant amount of noise in this area to continue causing issues.

Keep in mind that the US dollar has strengthened against many other currencies, so it does make sense that perhaps it would do so here. However, the recovery late during the day on Monday was rather impressive and should not be overlooked. Furthermore, the Australian dollar is highly levered to the commodities markets, which of course has been very strong. As long as that is the case, it is possible that we could see this market break out, but clearly, we have gotten far ahead of ourselves as of late, so at the very least a pullback could make sense. That being said, the markets have been very noisy, to say the least, and I think they will continue to be so. There are so many problems around the world right now that is difficult to bet against the US dollar, but then again, at the same time it is difficult to bet against commodities.