Wednesday, 6 September 2017

Gold bulls act aggressively, dominating the market

Posted by Valentine at 18:23 Labels:

The gold price is rising and the yellow metal continues to update local highs. Gold as a security asset continues to receive support amid escalation around North Korea and investors escaping from risk and uncertainty. In favor of the gold market, there are other factors: the approaching limit of the US national debt - Congress is just starting to discuss the issue of raising the country's public debt limit, which will reach its ceiling by September 29.

Do not forget about the latest data on the US labor market, which came out last Friday and were disappointing, sharply reducing the likelihood of an rate hike before the end of the year. As one can see there are plenty of reasons for gold to be under demand.

From technical perspective, gold updated the local maximum and came close to a strong resistance zone around $1344.30 during yesterday's trading. After a strong upward momentum, the profit-taking pullback turned out to be insignificant - the market ended the day at $1339.60. This alone indicates the strength of the upward trend.

Nevertheless, the current resistance zone of $1340-$1344 is quite strong and so far it has suspended the further growth. The closest support is located in the area of ​​the 50th Moving. In case of a breakdown of 50 MA, the adjustment will continue towards the targets of $1329 and $1315. However, the bulls in this market are very aggressive and will use the slightest pullback to enter longs.

Eur / usd - the euro consolidates around the 19th figure

As a result of yesterday's trading, EUR / USD currency pair gained on the weakness of the US dollar and was able to close the day's trading above the significant level of 1.1900. Thus, EUR / USD, on the eve of the ECB meeting and Mario Draghi's press conference, continues to be held near the important and significant level 1.1900. Intraday ranges are quite tight.

The highs of yesterday's trading at 1.1940 and the lows at 1.1867, respectively, are the closest levels of resistance and support, so a breakdown of one of these levels will most likely determine the direction of further trading.

However, it is possible that in the current situation, breakdown, both up and down, will be false as the main event of the week is coming! Tomorrow is the ECB meeting.

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