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FxWirePro: Gold Daily Outlook

Major resistance- $1217

The major three factors that drive gold prices

 

US dollar Index: Weak. DXY is consolidating after a good recovery of more than 50 pips. The index hits high of 95.56 and is currently trading around 95.23. The index should break below 94.85 (55- day EMA) for further weakness. The index has almost formed a double top around 95.70-75 and any major bullishness only above that support 94.31 holds. (Slightly positive for gold).

 

USDJPY: Trend slightly Bullish. The pair hits low of 110.38 and shown a good recovery of more than 100 pips. Short term trend is slightly bearish as long as resistance 112.15 holds. Any daily close below 109.78 confirms bearish continuation and a dip till 109/108 likely. Slightly positive for gold.

 

US 10 year yield : It has jumped more than 2.5% from the Thursday’s low of 2.865 on hopes of further rate hike. It is currently trading around 2.937%. Any break above 3.0160% confirms further bullishness.

 

US 2 year yield: The spread between US 10 year and 2 year has reduced to 23 bpbs from 35 bpbs.

 

Gold technical

Major support $1183

Major resistance - $1217

 

The yellow metal is consolidating after a decline of more than $10 from the high of $1206.80 on strong US dollar. It hits low of $1191.44 and it is currently trading around $1193.81. The trend is slightly weak as long as resistance $1217 holds.

 

On the higher side, any break above $1200 will take the commodity till $1208/$1217/$1224/$1230.

 

It is good to sell on rallies around $1200-01 with SL around $1190 for the TP of $1183

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