FxWirePro: Gold trades weak on strong US ISM data, good to sell on rallies
- Gold declined almost $17 yesterday on account of strong US dollar. The yellow metal hits low of $1305.25 after hitting fresh three-month high at $1321.20. The main reason for decline in prices was due to better than expected US economic data. US dollar index jumped almost 50 pips from the low of 91.75. It is currently trading around 92.17.
- US ISM manufacturing index rose better than expected for the month of Dec. it came at 59.7 compared to 58.2 in Nov. The new orders came at 69.4 compared to 64 highest since 2004. The minutes of the Federal open market committee confirmed that US economy is expanding at stronger pace despite hurricane related distortions. Most Fed members indicated that federal tax policy changes will improve the economic growth of US. There was a growing divide within committee on rate hike on low inflation and is expected to stay below target level.
- On the higher side, gold is facing strong resistance at $1321 and any break above will take the yellow metal till $1331/$1339 (161.8% retracement).
- The near term support is at $1300 (34- day EMA) and any violation below will drag the metal to next level till $1292 (55- 4H EMA) /$1287/$1278. Minor weakness below $1270 (200- day MA). Any break below $1270 will drag the gold till $1260/$1243/$1236 (Dec 12th 2017 low).
It is good to sell on rallies around $1312-$1314 with SL around $1321 for the TP of $1302/$1295.
Source: FXWire Technicals
4. January 2018 13:04:56