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Gold Action: Extending decline?

Market Analysis

XAUEUR, H4

The euro rallied following the latest opinion poll out of France, with the Opinionway survey showing support for pro-EU Macron rising to 61% versus 39% for Le Pen, up from respective 60% and 40% readings in the prior survey. An upward nudge in final April Eurozone services PMI, and a strong Ifo Q2 economic climate indicator, haven’t done the euro any harm either. EURUSD rallied from the post-Fed statement low at 1.0875, which is a four-session lows, to 1.0941, 9 pips shy of last week’s six-month peak. The move has reflected a broader bid in the dollar in the wake of the Fed’s post-FOMC meeting statement yesterday. which noted that economic slowing in Q1 was “transitory” while affirming that it remains on track to tighten rates further.

Therefore, XAUEUR rallied to an month low today at 1128.78, in the wake of the data, with weakness coming since April 13th, on the back of eased political concerns in France, with North Korea geopolitical risks, while the move lower was attributed also to the U.S. congress agreeing to fund the government through September, averting a potential shutdown.

XAUEUR broke earlier Medial line of Andrews’ Pitchfork indicator applied since 13th of March, while the pair seems extending the Lower Bollinger Bands patterns. Hence an entry was taken at 1129.54. Support was set at 1134.00. Target 1 is at 1127.00 and Target 2 at 1123.00. Additionally, in the 4-hour chart MACD and Parabolic SAR remain negative. Confirmation of a possible further deduction can also be noticed in the Daily chart, with MACD turning negative today, while RSI is at 28 sloping further down to the oversold territory. Additionally, XAUEUR manage to break yesterday the significant 200 Day EMA.

 

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Andria Pichidi

Market Analyst

HotForex

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