Free Forex Trading Signal July 2016 (EURUSD & Gold)

■ Market: Forex, Metals

■ Assets: EURUSD, Gold

■ Forecast: Gold Uptrend Continuation (↑), EURUSD to Range

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General Outlook

The global financial markets are still feeling the aftershocks of the Brexit earthquake. The initial panic has eased, but high uncertainty remains about what will happen next in Europe. Political turmoil is likely to continue as Poland and other Eurozone countries question the leadership of France and Germany, while Scotland may push for a new independence referendum. In this environment, any forecast is especially uncertain. Still, going long on gold seems like a safe bet no matter what happens.

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Our Previous Trading Signal

In our late April 2016 Trading Signal, we predicted that EURUSD would range without a clear direction and commodity currencies would weaken in May 2016. We advised, “May 2016 is expected to be a corrective month for commodity currencies. If you want to go long on commodity currencies, it seems wise to wait for a correction in May.” That correction did happen, with prices dropping 6-9%. Right now, we are optimistic about commodity currencies’ performance.

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EURUSD Technical Analysis

With everyone seeking stability, EURUSD remains a good tool to help stabilize financial markets, at least somewhat. EURUSD is expected to continue trading in a range through summer 2016.

■ Resistance (↑) 1.126-1.127 | 1.137 | 1.142 | 1.149-1.150 | 1.160-1.162

■ Support (↓) 1.0828 | 1.070-1.074 | 1.050-1.051 | 1.042

Chart: EURSUD Broader Range (D1, RSI, MACD)

EURUSD Statistics

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Gold Price Rises on Strong Momentum

When global uncertainty rises, demand for gold grows stronger. Gold acts as a 'safe haven' for investors during turbulent times. Right now, gold looks attractive based on both fundamental and technical analysis.

Gold is trading around $1,340, with momentum pointing toward $1,390. Near $1,400, we can expect strong selling pressure and profit-taking. Still, gold could be one of the best-performing assets in 2016.

🔗 More: »  Historical Price of Gold

Chart: Gold Price (D1, RSI, MACD)

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News and Updates

• Federal Reserve Policy on Rate Hikes

According to the Fed’s Dot Plot, one more rate hike of +0.25% is expected in 2016. However, CME Group 30-Day Fed Fund futures suggest the market prices a hike no earlier than December 2016.

Fed Chair Janet Yellen has said every Fed meeting is a “live meeting,” meaning no one knows exactly when the next policy change will happen. She also mentioned a possible change as early as July, but that was before Brexit. Given current economic and political conditions in Europe, we shouldn’t expect any major Fed rate changes before year-end.

• Job Creation in the US

The US economy added only +38,000 jobs in May 2016—the slowest pace in five years. Economists say the US needs about +150,000 new jobs monthly just to keep up with population growth. In recent years, the economy typically added over 150,000 jobs each month, with an average of around +200,000.

 

■ Free Forex Trading Signals: EURUSD, Gold

George Protonotarios for TradingCenter

July 4th, 2016