Top charts of the week

Summary:

• SP500 (US500) stays above the support

• Gold prices with a chance to bounce

• Low oil prices and the dovish BoC stance among reasons behind the weaker CAD

The Monday’s session on Wall Street was really interesting. After heavy declines major US indices managed to recover and finished above their flat lines (US500 ended the day above its crucial support zone - 2600/2620 points). The mentioned support zone has already helped bulls three times in recent weeks, hence the yesterday’s bounce could have been expected. Taking into account volatility in recent weeks one may expect the price to go back toward the upper limit of the consolidation (2820 points). However, one needs to remember that both levels (2800 and 2600) have already been tested several times therefore another attempt increases odds to see a long-awaited break. Will bulls be able to take control once again?

Source: xStation5

Another market we are looking at in today’s overview is gold. Heightened uncertainty along with fading odds with regard to higher rates in the US have pushed gold prices higher of late. As a result, gold prices broke through $1238, the level bulls had been dealing with for a long time. Breaking above the mentioned resistance has opened room to higher levels even toward the upper limit of the bullish channel ($1260-1264). This level is also underpinned by the 50% retracement of the most recent bearish wave. On top of that, bulls will have to deal with the 200DMA which constituted the important hurdle for them in May and June. Finally, keep in mind that investors are beginning to position themselves ahead of the next week Fed meeting - the key point for the US dollar and gold prices in the remaining part of the year.

Source: xStation5

The last market we are focusing on today is the USDCAD. The most recent BoC communique pushed the pair much higher sowing a grain of uncertainty with regard to the next year rate hikes outlook in Canada. In addition to that the CAD is burdened with low oil prices, however, in this case one needs to say that the WCS/WTI spread has narrowed substantially in recent weeks reducing the adverse net effect. Technically the pair has reached 1.3400 where bulls are struggling to push higher. Therefore, a possible reversal could be on the cards as the pair bounced off this level several times in the past.