Gold is still under strong pressure from the dollar and can not yet restore the positions that were lost at the beginning of the trading week.
The US dollar on Wednesday maintained its position, despite the publication of controversial statistical data. According to data from ADP, the growth in the number of people employed in the non-agricultural sector in February amounted to 183 thousand compared to the forecast of 189 thousand, but the January figure was revised upwards from 213 thousand to 300 thousand. Now the market is waiting for the publication of the main report on the labor market, which will be presented on Friday. The data on the trade balance caused serious concern among investors. In December, the deficit was -59,80B, against the forecast of -57,90B, for the worse, data for the previous month was also revised. Thus, in December, the largest monthly foreign trade deficit was recorded in the United States since 2008, and now many economists say that the growing foreign trade deficit could retard economic growth in the United States.
The news from stock markets, where the bearish trend continues to develop, partially offset the pressure from the dollar. The main US index for the third day in a row finished trading in the red, in the absence of positive news regarding the settlement of the trade conflict between China and the United States, as well as growing concerns about the development of the world economy. The demand for risky assets continues to fall, and in this situation, some investors once again turn their attention to gold.
In general, the yellow metal is now practically devoid of significant support factors and in such a situation it will be possible to rely on the resumption of a bullish trend for this instrument only if pressure from the US dollar eases, which is unlikely. The US currency is now showing resistance to all negative factors, while maintaining hegemony in the foreign exchange market.
Today, investors will be primarily focused on news from Europe, where the ECB meeting will end. Despite the fact that most experts do not expect changes in the basic parameters of monetary policy, the press conference of Mario Draghi, which will take place after the meeting, may have a very strong impact on the markets. In addition, today is expected the publication of the data on EU GDP growth for the fourth quarter of 2018.
On the chart, everything is bad for gold. The support area is 1285.00-1288.00, on which bulls have big hopes still can not turn the price up. On the contrary, we see increased pressure, which is likely to lead to the breakdown of the marked support area and the further development of the bearish wave, which could finally break the bullish trend that has developed in the market since autumn 2018.
Resistance Levels: 1290.00, 1299.00, 1310.00;
Support levels: 1285.00, 1284.00, 1280.00.
The main scenario - a decline to 1280.00, and possibly lower.
An alternative scenario - consolidation above 1290.00 and an increase to 1290.00.
Gold remains under very strong pressure. On the chart there are signals indicating a possible continuation of the bearish movement. Therefore, preference is given to sales that are worth looking for when the price rolls back to the area of 1290.00.
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