FxWirePro: Gold upside capped by 10 day MA, good to sell on rallies

Overall trend - bearish

• Gold has shown a good recovery of more than $20 after hitting low of $1211 on account of slight weakness in US dollar index. It hits high of $1235 and is currently trading around $1229. 
   
• The major three factors to be watched for gold price movement are

1. US Dollar index – Slightly weak (positive for gold)- DXY has declined more than 130 pips after hitting high of 95.65. It hits low of 94.21 and is currently trading around 94.38.
    
2. USDJPY-  weak (slightly positive for gold)- It has shown a minor correction and is trading below 20- day MA and is trading around 110.92.
    
3. US 10 –year yield – 2.89% (gained 2.01% from the low of 2.80% (negative for gold).
    
4. US 2 year yield  2.604% (0.33% higher). The spread between 2 year and 10 year yield (2.85%-2.604%) is 29 basis point slightly increased from 23 basis point.

• The pair is facing strong support at $1217 and any break below will take the yellow metal till $1209/ $1200 (61.8% fib)/$1160.
   
• The near term resistance is around $1236 (10-day MA) and any convincing break above will take the yellow metal till $1244 (20- day MA)/$1250
  
  It is good to sell on rallies around $1228-30 with SL around $1237 for the TP of $1201/$1165.