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Brexit, the Dollar, Gold, and all else

Brexit anxiety levels have accumulated into most financial market components, and with the referendum tomorrow (23 June), many of these stresses will unfold either way. Technical analysis of some components seems to indicate the ‘Stay’ vote will win and Brexit will retreat into history, for now.

Is the breakout in the US$ and Gold at the end of May a false or true breakout? Will the Brexit fall-out push the US$ higher and Gold lower, or vice versa. Whichever way prices break will decide which is true.

The US Dollar retreated up from short term support at 93.38 and made another bullish engulfing candle suggesting higher levels next.

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Janet Yellen’s testimony to the US Congress yesterday in answering some tough questions indicates a lower Dollar: She seems to have shifted her stance from ‘when’ to ‘whether’ should rates be hiked which is more in keeping with global economic conditions. Lower Dollar values will support equities.

The Gold price closed below the 10-day moving average (MA) just short of 20/50-day MA support. The end of May low of $1,201.50 provides critical support with 200 day MA close at hand. If this support holds prices will respond upwards, but if it fails prices may retreat still much lower to $1,130-$1,110 before the next up cycle begins.

$Goldsmall

Gold miners are retreating in sympathy with metal prices.

The Oil price has broken down out of a rising wedge pattern and is consolidating around $50 a barrel. It may hold this level or be tested by the 200 day MA below $44.

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