Gold Poises Bearish Momentum Over Trump's Tax Plan Complication
FxGrow | Apr 27, 2017 22:00
Yesterday, gold was seen fighting the 1260 level with failure to break as market were anticipating Trump's Tax so long waited plan, but the delay for plan delivery, caused XAUUSD to fight dip forces, building a stronger support level. Around 6:00 PM GMT, the Tax plan was announced by Mnuchin with expectations of positive results, but market did not digest the details with flaws indicating a possibility of trade balance deficit. As a result, US Dollar Index rolled from 99.18 high, anchored 98.76 yesterday low, and gold rallied a bit with 1270.62 high but then faded gradually with today's trading hours, rested at 1263.18 today's low.
Overall, gold stands on the edge of either breaking the 1259 and confirming the bearish momentum, or the yellow metal will shift course and recovers from Monday's opening gap depending on U.S Data outcome today. On the other hand, political tension, even though it has soften a bit and to be considered on a stand-by position, could provoke gold as a sacred haven substitute in case political tension tightens. Also, next week gold will be the center of attention as final round of French election approaches (May 7th), and the fight between Le Pen (Anti EU) and Macron (Pro EU), will boost gold yet-again with expectations to overpass the 1300 level. Gold Currently trading 1264 intraday.
h2 Fundamentals:/h2
1- USD - Core Durable Goods Orders m/m and Unemployment Claims today, both at 12:30 PM GMT.
Technical overview:/h2
Trend: Bullish Sideways
Resistance levels : R1 1271.77, R2 1278.15, R3 1288.51
Support levels: S1 1259.10, S2 1250.22, S3 1242.92
Comment: Gold remains unconvincing bullish being near S1 level which in case penetrated, signs of trend reversal to be considered. Closing above R1 level will re-confirm bullish momentum and project further bullish waves towards R2&R3 levels with a reminder or last 2 weeks rallies. On the other hand, dips should find S1 level, in case of penetration, market should expect selloffs and wash towards S2 level.
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