Gold is up to 1208 after falling for several weeks and EUR is still continuing its bearish wave
Gold edged up on Tuesday as a recent dip to multi-week lows attracted some bargain hunters, but prices were well within recent ranges as the dollar remained on an upward trajectory. Spot Gold edged up to $1208.16 per ounce, having fallen to a more than the six-week low of $1,180.34 on September 28.
It is unusual that gold is trading higher even with the stronger dollar. People are looking to buy into gold as they believe that prices below $1,200 are indeed attractive. A higher dollar makes bullion more expensive for holders of other currencies, curtailing demand
The gold bears still have the overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close in December futures above solid resistance at $1,220.70. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at the August lows of $1,167.10. First resistance is seen at $1215.00 and then at this week’s high of $1220.70. First support is seen at Monday’s low of $1,188.10 and then at last week’s low of $1,184.30.
The Italian bonds and European stocks were able to stabilize near the day’s lows as government officials affirmed the country’s commitment to the euro, after comments from Italy that called to remove themselves from the Euro currency. Italy’s 10-year yield rose briefly above the 3.40% to approach highs that have not been seen since May, while bund and Treasury futures pulled back from their respective session highs, with yields 2bps-4bps lower across the German curve, and 1bp-2bps lower across the U.S.
The Italian FTSE MIB trimmed earlier losses of almost 2%, with banks being among the biggest laggards, with trading in Banco BPM and UBI halted after hitting their respective limit down. The Euro Stoxx was down 1%, while the S&P futures extended its declines.
WTI crude traded near the $75.50 after closing Monday at its highest level since 2014, while Brent went back below the $85 level.
Another Italian headline, another day lower for the euro. The common currency weakened, and Italy’s bonds tumbled after Claudio Borghi, a prominent Eurosceptic, said that the nation could resolve its debt problems with its own currency. Borghi’s clarification later that there were no plans to leave the euro did little to improve sentiment. The dollar rose along with Treasuries and German bunds amid risk-off trades. Equity markets declined, while crude oil rose to highest in almost four years.
EUR/USD – At bar 5 on daily DeMark buy setup as bearish momentum stays strong; close below 55-DMA threatens a dip below 1.1525 support and made 1.1504 as a low as bearish engulfing on the weekly keeps longs on their toes; trades heavy overall, RSI still to enter oversold levels. The immediate resistance is located at 1.1650 followed by 1.1760. Immediate support can be found at 1.1500 followed by 1.1480. Looking forward to trading in a possible range today from 1.1500-1.1590
GBP/USD – Forms bearish engulfing on the weekly yet with little width; 55-DMA support key for bulls. GBP/USD went down and reached 1.2940 as a low for yesterday. The immediate resistance for today is 1.3040 followed by 1.3105. Immediate support can be found at 1.2920 followed by 1.2860. Look for a possible trading range today from 1.3000-1.2900.
USD/JPY – Momentum studies show early signs of a pullback as the pair hit the strongest level in nearly 11 months. USD/JPY reached 114.02 as a high yesterday failing to break 1.1406 the hight on Tuesday. The immediate resistance is at 114.35 followed by 114.60. Immediate support can be found at 113.30 followed by 112.55.
AUD/USD – The Australian dollar broke 0.7200 level and restarting to continue its downtrend move to 0.7161 as a low. Immediate support at 0.7083 with next support at 0.7025. The immediate resistance is at 0.7280 followed by 0.7362. Expected range today from 0.7200-0.7120.
ZAR/USD – The rand slipped overnight, trading at levels over R14.20/$ on Tuesday morning, following a trade agreement reached between the US and Canada and Mexico.
The currency was trading slightly weaker (0.82%) at R14.33 by 08:45.
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