Elliott Wave - Gold, AUD/USD, USD/CHF

Hello Elliott Wave traders.

Resistance on the U.S. dollar index that was mentioned in yesterday's analysis and it held prices below 78.00, and therefore showed some dollar weakness on a day that oil moved higher and the ECB were out jawboning a rate increase. The aussie moved higher and hit the temporary resistance around 0.8700. We made an update below on the aussie . Today we also check the one hour gold chart; it seems that we are bullish in the short term. Any higher moves on this one will make for a weaker dollar, and therefore also equates to the euro going higher and swissy lower. The swissy looks very interesting for the traders who want to sell the U.S. dollar, it is very reactive to dollar strength or weakness; we will check it later.

Today's Charts

GOLD

We were recently talking about possible gold lows on Friday, if the dollar strength would be able to continue. Well, this one could be very tricky right now, especially as we have already seen near-term dollar highs on Monday against the major currencies. Euro made the fifth wave on the downside, aussie also, and swissy on the upside. Temporary dollar bulls could be looking to switch sides it seems, and this is the reason why we labeled possible waves I and II or A and B on the chart below. It is better to stay away on this one for some time, to see how market reacts to this critical period of trade; above the trend-line and below the 838.00 resistance. Any break to the upside should lead us much higher; in that case 838.00 should react as a support in the future, in a ‘resistance turns to support' move. Traders should also pay their attention to the black, lower trend-line; any move below it could lead to new lows very fast. That is why we are saying to let this one play out; there is enough room either way to wait for market momentum and confirmation.

AUD/USD

Below we have the one hour aussie chart which is showing something similar to gold, the two are correlated on the longer-term charts due to Australia's abundance of natural metal reserves. The prices are trading in a very critical area right now, around 0.8686, which could be the key for new highs if the break to the upside appears or to new lows if the prices bounce from the current levels. Short time traders could jump short very quickly, because of the overbought RSI indicator with the targets on the lower trend line support. Waiting to see how the market develops in the near term on gold may help in managing the trade, and the expectancy.

USD/CHF

The pair looks the most interesting of all at the moment. Traders that are optimistic about the dollar weakness for the next few days may be already short. Technically there is a short signal for the next few sessions; the clear breakout through the lower trend line support. The RSI indicator is also showing the huge bearish divergence after the red wave V was completed just below 1.1100. If the fundamentals stay as they are, then a move to the support around the 1.8000 would not be a surprise to see for some. Today we are expecting GDP numbers for the U.S., so traders that are not in the position should wait on this release before they get involved; Poor GDP should bring things lower on this pair.

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