FxWirePro: Gold trades lower on strong US dollar index and weak yen, forms bearish divergence in daily chart,good to sell on rallies
Gold is trading weak in this week after a slight jump till $1266.80. The main reason for fall is strong US dollar index and weak yen. The yellow metal has formed a temporary bottom around $1237 on Jul 3rd 2018. US CPI da…
Gold is trading weak in this week after a slight jump till $1266.80. The main reason for fall is strong US dollar index and weak yen. The yellow metal has formed a temporary bottom around $1237 on Jul 3rd 2018. US CPI data shows that Consumer price index rose to 0.1% compared to forecast of 0.2%. But CPI y-o-y has jumped up 2.9% highest level since 2012. The slight increase in inflation will support higher interest rates.The yellow metal has lost its safe demand appeal.
The major three factors to be watched for gold price movement are
US Dollar index – Strong (negative for gold)
USDJPY- Bullish (negative for gold)
US 10 –year yield – 2.85% (0.11% for the day (neutral for gold)
The pair is facing strong trend support at $1239 (trend line joining $1046 and $1122) and any break below will take the yellow metal till $1234 (200- W MA) and any weekly close confirms further weakness.
The near term resistance is around $1252 (10- day MA) and any convincing break above will take the yellow metal till $1258/$1262 (20- day MA)/$1266.
It is good to sell on rallies around $1250-52 with SL around $1260 for the TP of $1234.
