FxWirePro: Gold trades well below trend line support on strong USD, good to sell on rallies

• Gold prices has shown a $15 dip from yesterday’s high of $1276 after a minor consolidation. The yellow metal has brokne previous low of $1275 a nd decliend sharply till $1262 at the time of writing. The major reason for huge decline in gold is due to strong US dollar index. The yellow metal declined more than $25 in previous week. US dollar was trading high against all majors after more hawkish Fed. The slight divergence in Fed and ECB is dragging Euro lower. US 2 –year bond yield recoverd slightly from low of 2.49% and is curretly trading around 2.57% and 10 year yield is trading steady after decline slightly till 2.85%. The trade tension between US and China has slightly eased and USDJPY is trading higher and has jumped almost 50 pips for the intraday. It is currently trading around 110.67. The yellow metal is currently trading around $1262.97.
   

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

1. US Dollar index – Strong  (negative for gold)
    
2. USDJPY- positive   (slightly negative for gold)
    
3. US 10 –year yield – 2.95% (-0.31% for the day (neutral for gold).

• The yellow metals near term resistance at $1307 (200- day MA) and any convincing close above will take the yellow metal till $1316 (55- day EMA)/ $1324 (50% fibo).The minor resistance is around $1285/$1293 (20- day MA). 
   
• On the lower side, near term support is around $1260 and any break below will drag the yellow metal down till $1250/$1236.
  
  ​It is good to sell on rallies around $1265-67 with SL around $1276 for the TP of $1250/$1236.