Gold Steady

Gold has entered into low volatility environment and is trading with very low volumes so far. The precious metal opened at $1,337 and is now $1,334. It is not doing much today but this can be considered normal having in mind that we have no important US data scheduled. Maybe traders and investors can use a bit of peace in this otherwise very volatile market.

On one hand, Gold has reached a support zone at current market price and this might be the reason for the low volatility we witness today. On the other hand, market participants can anticipate the movement of the metal and drive it into either directions. Whatever it may be, Gold had an impressive first half of the year and not so impressive second half so far.

Exciting moments are ahead of us in Gold market until the end of the year and two major events would be the September and December FOMC meetings.

Chart: XAU/USD D1

GBP/JPY Posts Losses

GBP/JPY continues its downward movement today that started on Sept 2 when the pair reached resistance which might be considered the right shoulder in a Head and shoulders pattern. So far the pair has been successfully drawing the continuation of the H&S pattern but if we want to press forward we have to break the current support level at 135.50.

Is 135.50 is broken then the path to the neckline looks like a very good and probably objective. The neckline is at 129.50 which would then have to be broken if the H&S is to be validated. Until now, the pair has had an exciting journey going twice from the multi-year low of 129.25 to above 138.

By all means, this looks like the final third of the major move from 195.88 and as we know, the last third of the move is usually the hardest one to trade as prices go parabolic and volatility is destroying people's accounts.

Chart: GBP/JPY H4

USD/JPY Sharply Lower

It may come as a surprise to some people to see the Yen rallying again after the "Abenomics" is about to take place and depreciate the Japanese currency. The reason behind the latest rally is the weak US data that has been coming out this week and last Friday.

First, we had lower than expected jobs report at 155K, way off from the 180K expected. Although experts say anything above 100K in a month is good, traders and investors couldn't sustain the bullish momentum in the US dollar and yesterday when the ISM data was released the bears took over. The US dollar dropped sharply against all pairs on result of 51, a lot lower than the 55 expected.

These signs are early indicators of a weakening US economy which cools off the chances of a rate hike at the third quarter of September.

Back to the Yen, USD/JPY went to 104.32 and then dropped to a low of 101.20. After the strong upward movement from 99.54 to 104.32, the pair is now again under bear pressure and it might reach the 100.00 level.

Chart: USD/JPY D1

USD/JPY Above Resistance

USD/JPY reached 103.80 in today's session. A level substantially higher than the resistance line at 103.00.  The pair has been trading to the upside since last month when it reached a low of 99.55. Since then USD/JPY is going steadily North with only mild corrections before the upward move continues.

With the resistance level behind us, the pair is now ready to take it higher and possibly break the last high of 104.32. If that doesn't happen, then we might get back below the resistance and gravitate towards 103-102.50.

However, the double bottom that the pair formed below 100.00 level acts as a strong indicator that the downfall is over and the bulls have taken over for the long term.

Chart: USD/JPY H4

USD/CAD Down

USD/CAD was one of the biggest losers on Friday when the NFP and jobs data were released. The pair went from 1.3114 to below 1.30 and reached 1.2952 in the earlier hours today. Currently the pair is trading at 1.2960. This week we have several events that will create higher volatility and may define the trend further.

My expectations are that the pair will reach 1.3280 before the end of the week and after that there will probably be a correction as we would have reached the resistance level as well as the 200SMA.

Today, however, mild volatility can be expected as we have no data coming out and market participants might wrap up around 1.2970 in anticipation of the next big news.

Chart: USD/CAD D1

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NZD/CAD at Resistance

NZD/CAD reached resistance for a sixth time. This is the reality in the currency market. Probably most of the people would think that it is impossible for a pair to reach a certain level six times and not be able to break it. But the chart shows that NZD bulls are unable to win the argument for a sixth time.

Today the pair reached resistance at 0.9530 and withdrew to lower levels. The positive Canadian data published yesterday was not enough to turn the tide and the pair appreciated further. As we can see, NZD/CAD is strongly bullish since April this year and if we can get a break above 0.96, this would imply that a continuation of the bull run is the most likely scenario.

Until then, simply watching the tape brings enough pleasure.

Chart: NZD/CAD D1