Gold recovered July’s losses

XAUDUSD, H4 & Daily

U.S. equities rolled over from highs coinciding with a surge in the euro through 1.16 and another whipsaw on yields. The presumption is that the ECB/euro axis is still driving the volatile trade, but there was also a US AG Sessions presser expressing his wish to continue with his job at the Justice Department, along with others, despite criticism from his boss Trump. A NY Times article quoted Trump as critical of the AG, Deputy AG, former FBI Director, acting FBI Director and Special Counsel Mueller. He said he wouldn’t have hired Sessions if he’d known he would recuse himself from the Russia investigation. He was critical of conflicts of interest in the Mueller camp as well, which has reportedly begun investigating some family members. Note, that the NY Times has been one of Trump’s main adversaries, however, in terms of “fake news.”

While ECB policy has reinvigorated the euro’s rally, a run of softish data out of the U.S. and concerns about Trump’s agenda have been taking a toll on the dollar. The the dollar fell more broadly, as Wall Street gave back gains on reports that special prosecutor Mueller is apparently set to expand the Russia probe to Russia business dealings with Trump, Manafort and Kushner. Futures on the other side such as Gold,  were the middle of their intra-day range, with XAUUSD  closing yesterday at $1,244.30, after bottoming at $1,235.24, and peaking today up to $1,246.35 high in early Asia. The Gold prices seems that will keep to advance higher by US Dollar weakness.

Therefore this week’s US Dollar weakness, the break of  1245.00 level along with a break of 50 and 200 Day EMA,  prompted a LONG position today on both 4-hour and Daily timeframes.  Most important on our decision was also the fact that XAUUSD manage to stay above the Trendline set since 2016’s low ( red line in our Daily chart).  Entry was at 1247.10 with target 1 and 2 on the 4 hour chart at 1248.50 and 1249.00 respectively, beyond the recent fractal high. The Daily chart targets are at 50.0 Fibonacci level, i.e. 1250.00,  and at the middle of 50.0 and 61.8 Fibonacci level (which is likely to provide resistance to the move up) at 1253.90.

Both charts show price above the key 20 period moving average and in the upper half of the upward sloping Bollinger bands. RSI and the Parabolic SAR both remain positive on both charts too. These positions have stop loss levels set at 1243.00(4H) and 1240.00 (daily).


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Andria Pichidi

Market Analyst


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