Gold, S&P 500, AUD/USD, Trader Positioning – Talking Points
- Will gold prices bounce as S&P 500 hits new highs?
- IGCS seems to be pointing in that direction for now
- Outlook for growth-linked AUD looking more choppy
In this week’s session on IG Client Sentiment (IGCS), I discussed the road ahead for gold prices, the S&P 500 and Australian Dollar. IGCS is typically a contrarian indicator, a tool that I incorporated with fundamental and technical analysis. For a deeper dive into where these assets may go, check out the recording of the webinar above.
Gold Sentiment Outlook – Bullish
The IGCS gauge shows that about 82% of retail traders are net long gold. Exposure to the downside has increased by 7.66% and 6.10% over a daily and weekly basis respectively. Recent changes in sentiment warn that the current price trend may soon reverse higher despite the fact traders remain netlong.
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Gold Technical Analysis
XAU/USD climbed to the ceiling of a Falling Wedge over the past 24 hours. This is typically a bullish chart pattern, where a push above falling resistance could open the door to extending gains. That would places the focus on the 20-day and 50-day Simple Moving Averages (SMAs).
XAU/USD Daily Chart
Gold Chart Created in Trading View
S&P 500 Sentiment Outlook – Bullish
The IGCS gauge implies that about 37% of retail investors are net long the S&P 500. Upside exposure has decreased by 11.46% and 10.40% over a daily and weekly basis respectively. From here, the combination of current sentiment and recent changes offers a stronger bullish contrarian trading bias.
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S&P 500 Technical Analysis
S&P 500 futures are pressuring the November 9th high at 3668, looking to extend the push further into all-time highs. Negative RSI divergence does show that upside momentum is fading which can at times precede a turn lower. That may place the focus on the 20-day SMA and September highs for support.
S&P 500 Futures – Daily Chart
S&P 500 Chart Created in Trading View
Australian Dollar Sentiment Outlook – Bullish
The IGCS gauge shows that about 33% of retail traders are net long AUD/USD. Upside exposure has climbed by 13.76% and 7.92% from yesterday and last week respectively. Recent changes in sentiment warn that the current price trend may soon reverse lower despite the fact traders remain netshort.
Australian Dollar Technical Analysis
AUD/USD is pressuring highs from September, making for a zone of resistance between 0.7343 and 0.7413. If this area holds, the 20-day SMA may come into focus for support. Otherwise, extending recent gains exposes the December 2017 low at 0.7502 followed by the June 2018 high at 0.7677.
AUD/USD – Daily Chart
AUD/USD Chart Created in Trading View
*IG Client Sentiment Charts and Positioning Data Used from December 2nd Report
— Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter