Will the US Dollar Fall Victim to the Trade War
- Trade war worries drag world stocks lower, yuan steadies
- Fed June minutes due Thursday, payrolls due Friday
Gold rose to a one-week high on Wednesday, extending the prior session’s rebound from a seven-month low, helped by a softer U.S. dollar and smoldering trade policy tensions, though the prospect of the Federal Reserve raising interest rates further may limit gains.
The U.S. dollar index fell against a basket of major currencies, while the Chinese yuan rose for a second day with central bank support, after seeing an 11-month low this week.
A weaker U.S. dollar makes dollar-priced gold cheaper for non-U.S. investors.
Gold has been trending lower for several weeks and this being (U.S) non-farm payrolls (week) the dollar is likely to remain in range, so people are taking profit on dollar and gold positions.
I’m still not convinced we’ve seen the lows so long as gold remains below $1,300. The dollar is on an upwards trajectory. I don’t think (looming U.S. interest rate) hikes are fully priced into the dollar or gold.
Spot gold was up 0.3 percent at $1,256.20 an ounce by 1:59 p.m. EDT (17:59 GMT) after touching $1,261.10, a one-week high. The yellow metal has gained over $20 from Tuesday’s low of $1,237.32 an ounce, its weakest since Dec. 12.
U.S. gold futures for August delivery rose 0.4 percent to $1,258.10 in a shortened session and will not have a settlement price due to the U.S. Independence Day holiday on Wednesday.
Investors are now looking to minutes of the June U.S. Federal Reserve meeting due for publication on Thursday and the U.S. non-farm payrolls and unemployment data on Friday for further cues on monetary policy. Markets are pricing in two more Fed interest rate hikes for 2018.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 1,284.33.
The projected upper bound is: 1,274.08.
The projected lower bound is: 1,235.65.
The projected closing price is: 1,254.87.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 48.4546. This is not an overbought or oversold reading. The last signal was a buy 1 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 36.94. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 1 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -41. This is not a topping or bottoming area. The last signal was a buy 1 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 12 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed up 3.770 at 1,256.200. Volume was 8,900% above average (trending) and Bollinger Bands were 78% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1,256.09 1,290.89 1,302.55
Volatility: 9 9 11
Volume: 1,707 341 85
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
PREC.M.XAU= is currently 3.6% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect very strong flows of volume into XAU= (bullish). Our trend forecasting oscillators are currently bearish on XAU= and have had this outlook for the last 11 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.
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