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FxWirePro: Gold Attempts To Rebound At 100-DMA, Major Uptrend On Saucer Turns Dubious – Trading & Hedging Setup
Technically, gold price chart (XAUUSD) shows bounce back at strong support of 100-DMAs, currently, edging above 7-DMAs and trading at $1,897 levels (refer daily chart). Thereby, the current price continues to spike further testing support at 7-DMAs despite recent price dips. Prior to which, as stated before in our recent post, bulls bounce back especially after testing the strong support at $1,445 - $1,455 levels and gold’s exhaustive rallies upon some bearish patterns.
On a broader perspective, although bulls break-out stiff resistances of 1511.36 level (i.e. 61.8% Fibonacci level), retraces almost 88.6% of December 2015 lows of (i.e. 1044.62) and August 2011 highs of (1922.88), the current prices spike off well above EMAs with bullish crossovers, the major uptrend now seems to be taking a halt for some time. Hence, no wonder even if the trend either drifts in sideways or plummets a bit. However, minor trend is likely to spike further.
At spot reference: $1,897.62 level, on trading grounds, boundary options trading strategy with upper strikes at $1,918 and lower strikes at $1,879.344 levels. One can achieve certain yields as long as the underlying spot FX remains between these two strikes on the expiration.
Alternatively, on hedging grounds, long positions of CME gold contracts of April’2020 deliveries have been advocated so far, we now reshuffle the hedging strategy with short CME for December’20 deliveries as we could foresee downside risks amid geopolitical turmoil and the global financial crisis.