FxWirePro: Gold rebounds from 18- month low , slight recovery till $1200 is possible

Overall trend - bearish

Gold has recovered more than $20 from the low of $1160.The main reason for slight rebound is due to short covering. The yellow metal is in oversold zone and it has lost already $50 this week. DXY is trading slightly lower after hitting 13 month high around 96.98. 

The major three factors to be watched for gold price movement are

1. US Dollar index – bearish (positive for gold)- DXY has declined more than 50 pips after hitting high of 96.98. It is currently trading around 96.56.
    
2. USD/JPY-  slightly bullish (negative for gold)- The pair has taken support near 55- W EMA and shown a good jump from that level. It is currently trading around 110.82 (0.07% higher).
    
3. US 10 –year yield – 2.877%. It is trading flat for past one week. It is neutral for gold.
4. US 2 year yield 2.625% (0.16% higher). The spread between 2 year and 10 year yield (2.87%-2.625%) is 25 basis point slightly reduced from 35 basis point.

The pair is facing strong support at $1160 and any break below will take the yellow metal till $1150/$1140.

The near term resistance is around $1180 and any convincing break above will take the yellow metal till $1190/$1196 (5- day MA)/$1201 (7- day MA).

It is good to buy on dips around $1168-70 with SL around $1159 for the TP of $1190/$1196.