On Tuesday, gold once again updated the maximum of the year, but, in the second half of the day, it was under pressure from the dollar and is now trading in the red zone.
United States yesterday published weak statistics on sales of new housing and consumer confidence index CB, but traders ignored this information, focusing on the presentations by FOMC members and Fed Chairman Jerome Powell. Powell, in his speech, noted more compelling reasons than before for applying more stimulating monetary policy to maintain high rates of economic growth. But the strongest market reaction was caused by the comments of James Bullard, who did not agree with Powell in assessing the current state of the economy. He assesses the prospects for the development of the economy more optimistically and, contrary to market expectations, believes that lowering the rate by 0.25 bp will be quite enough for leveling the negative factors affecting the economy. Previously, many experts have suggested that the Fed in the coming months may lower the rate by 0.5 bp.
Today, the dollar index continues to be traded in the green zone, which is the main reason for the development of gold correction. But, this asset does not remain without support and maintains high chances of resuming upward movement. Firstly, the quotes are supported by the situation on the stock exchanges where the main indices are traded in the red zone. Pressure was put on the market by statements by a high-ranking White House official that the United States did not intend to make concessions in the US-China trade negotiations. Secondly, despite the local growth, the US dollar remains vulnerable and against the background of the publication of the next portion of weak economic statistics (today a report on orders for durable goods will be presented in the USA) may again go down.
The correctional movement is developing on the chart, which may soon be continued, as the bears gradually increase the pressure on the level 1403.00. Therefore, today we are waiting for the breakdown of this level and a further decline to 1393.00 and 1383.00.
Resistance Levels: 1423.00, 1436.00, 1440.00;
The levels of support: 1403.00, 1493.00, 1383.00.
The main scenario - consolidation below 1403.00 and a decline to 1383.00.
The alternative scenario is a false breakout of the level of 1403.00 and a recovery to 1423.00.
There are still support factors for gold on the market, but bearish signals dominate locally on the chart, so we’ll look at sales from 1423.00 within a day.
Only from November 02nd, 2020, to January 04th, 2021, Deposit Bonus 200% is available for all FortFS clients! Use the advantage to engage for the unique offer within a limited period: activate the deposit bonus and get up to 200% on the deposit amount on your trading account! How to get a Deposit Bonus of […]
Only from 23 to 25 of November, the largest no deposit bonus 100 USD is available for all Forex traders! 🏆 Bonus details: 100 USD maximum withdrawal 75 lots of required trading turnover 2 weeks to try all of the trading conditions Available for cent accounts 📍 How to get the bonus: 1) Register an […]