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FxWirePro: Gold trades higher after ECB monetary policy, good to buy on dips

 

  • Gold has recovered sharply after hitting low of $1235 on account of weak U.S dollar. The yellow metal jumped till $1247 yesterday and is currently trading around $1238.80.
  • Euro jumped sharply against U.S dollar after positive comments from Maria Draghi. ECB has kept its interest rates unchanged at 0%, the marginal lending rate at 0.25% and deposit rate unchanged at -0.4%. Euro rallied to fresh 14 month high at 1.16568 yesterday as Draghi promised QE discussion in autumn.
  • Technically gold has closed well above 200- day MA for past four trading session.
  • Gold’s near term support is around $1224 (10- day MA) and break below will drag the commodity down till $1207 (50% retracement of $1296 and $1122)/$1195. The yellow metal should break below $1180 for major trend reversal.
  • On the higher side, in the daily chart minor resistance is around $1243 (55- EMA) and any break above will take the commodity till $1250/$1258.

It is good to buy on dips around $1240-$1242 with SL around $1230 for the TP of $1258/$1277.

 

Our chart for the call

 

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