Yesterday, I identified the continued weakness the Gold against US dollars was experiencing and wrote “Gold traded lower again today to lows of the week, bottoming so far at $1,331.93, after printing six-week highs of $1,356.85 on Tuesday. A bit of dollar strength prompted position squaring, which has seen the contract head back close to its 50-day SMA, currently at $1,331.48. The Daily technical indicators, continue to send bearish signals, indicating that the weakness in the market is not over yet……Given overall market nerves on trade, tech stocks, and geopolitics, including North Korea and Russia, dip buying can be expected to continue in XAUUSD. Hence a Short position in long term has been triggered at 1,335.60, with Targets at 1,326.40 and 1,316.30. Support comes art 1,343-1,348.00 area.” Hence on this entry, the 1st Target was hit, while the 2nd Target at 1,316.30 still holds.
The 2nd Target for he particular commodity, still holds, since weakness has been seen to persists today as well, with the asset remaining below the 20 and 50 DAY SMA. The Daily momentum indicators on the other hand, provide a mixed picture, since they remain close to the neutral zone. Meanwhile, in the shorter time-frame such as the 4-hour chart, XAUUSD is traded below all the 3 MAs, with Strong intra-day Resistance at the 200-period SMA, at 1,329.00. The momentum indicators continue to send bearish signals, as MACD turned negative overnight, Stochastic is moving within the oversold Territory and RSI flattered at 30s area.
Hence despite the mixed data seen today out of US, the greenback remained steady against the most major currencies, but weak against Yen and Gold. The downdraft on Chicago PMI and downward revision on U. Michigan sentiment, left EURUSD at 1.2325, USDJPY around 106.30 and XAUUSD at 1,322.22. Wall Street remains higher, though off its best levels, while yields have stayed soft.
The Michigan sentiment surge to an downwardly-revised 14-year high of 101.4 (was 102.0) from 99.7 in February and 95.7 in January left us with the loftiest level since January of 2004, with a Michigan reading above prior peaks of 100.7 last October and 98.5 from January of 2017. At the same time, U.S. Chicago PMI dropped another 4.5 points to 57.4 in March after falling 3.8 points to 61.9 in February. This is a third consecutive decline for the index.
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