XAUUSD, Day – Although gold prices are significantly less volatile, due to the progress of trade negotiations between the US-China since October, however, this morning, gold prices continue rising further to a new high in the month of 1489.57. This followed USD slight weakness on the disappointing US durable goods released last night. the data were not in line with market expectations while the uncertainty around Brexit and the US-China trade agreement remains.
In the technical perspective, volatility has clearly decreased since the end of October. The gold futures went down to a 3-month low of 1445.55 on 12 November and gradually sideway until the end of November within the lower territory of the downchannel seen since September. In December meanwhile it started moving northwards towards the upper trendline of the channel, which currently retests. Therefore, it is essential to look whether gold prices will be able to break through the upper border of the channel (solid line).
MACD lines meanwhile, have turn in the positive territory since the UK election day last week. A cross of the signal line above neutral zone could confirm the turn of Gold’s outlook into positive in the medium term.
In addition, during the holiday break, it is possible that the price of XAUUSD may be within the sideways framework, as thin trading conditions prevail.
However, during sparse trading, we sometimes see Flash Crash event as participants closing their positions for year’s end, similar to what we saw in the AUDJPY earlier this year. That is assumed to be caused by low trading volumes.
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Market Analyst – HF Educational Office – Thailand
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