US Market Overnight: Rallies in Equities not translated to higher Gold prices.

USD Basket (1M)

The basket index crashed yesterday, posting the largest drop we’ve seen in a month and taking out 0.95 support along the way. Cable and Fiber have now entrenched their positions above 1.30 and 1.60 following this move, with weakening in both currencies a possibility should USD Basket climb back up to 0.95.

S&P 500 Futures Daily

The Eve-Adam double top has been invalidated with past 3 days price actions, with price showing a “Hammer” candlestick just at the support of the 2 tops. Nonetheless, the possibility of a triple top cannot be ruled out, or at least the possibility of ranging trend should be considered especially if price stalls before 1,470 with a reversal candlestick formed.

Dow Jones Industrial Average Futures Daily

Similar to S&P’s chart, with the double top invalidated perhaps even stronger due to the confluence of upward trendline and support. Again the possibility of triple top should not be disregarded, and do keep a look out of how price move from here as we could see either a bullish breakout, a rebound back to upward trendline or consolidation along trading range found between 14-25th Sep ( Post QE3 range).

Gold/USD H4

Previous support continue to act as resistance, with price potentially heading lower after a failed move higher. We could see price fall back to Pre QE3 trading range of 1,700 -1,740. Alternatively, another possibility would be a bullish breakout that could bring price back into Post QE3 range.

Bottomline:

Equities enjoyed another bullish day as earnings from companies continued to surprise on the upside. As a result of the Risk Rally, USD understandably became weaker. Despite the weakening in USD, we are not seeing any further increase in Gold prices, neither was the rally seen in Gasoline and Crude. 

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