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FxWirePro: Gold trades weak on strong US dollar, good to sell on rallies

Major resistance- $1217

The major three factors that drive gold prices

 US dollar Index: Slightly bullish. DXY has recovered sharply from low of 93.95 after fed monetary policy. The index has broken major resistance at 94.40 (10- day MA) and jumped till 95.02 .The next near term resistance is around 95.10 (200- 4H MA) and any break above  targets 95.25. It has almost formed a double top around 95.70-75 and any major bullishness only above that level. (negative for gold).

 

USD/JPY: Trend extremely Bullish. The pair has broken major resistance 113.20 and jumped till 113.63 yesterday.It hits new year high and is currently trading around 113.54.Minor support is around 112.50 and any break below targets 112. Short term trend is slightly bullish as long as support 112 holds . Any daily close below 112 confirms minor bearishness and a dip till 111/110.38 likely. Slightly positive for gold.

 

US 10 year yield : US 10 year yield has shown minor recovery of more than 1.5% from the low of 3.03% It is currently trading around 3.053%. Any break above 3.129% confirms further bullishness. Slightly negative for Gold.

 

US 2 year yield: It hits 10 year high at 2.833%.The spread between US 10 year and 2 year has reduced to 22bpbs from 25bpbs.

 Gold technical

Major support $1183

Major resistance - $1217

 The yellow metal has lost more than $15 from the high of $1198 and it is currently trading around $1185. The trend is slightly bearish as long as resistance $1217 holds.

 On the higher side, any break above $1210 will take the commodity till $1217/$1224/$1230.

The near term support is around $1189 and any violation below will drag the commodity down till $1195/$1200. it should break above $1215.

 It is good to sell on rallies around $1195-1197 with SL around $1205 for the TP of $1181.

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