Gold prices moved lower and was rangebound trading sideways, bouncing near support levels. The dollar gained traction against the Euro on Wednesday which weighed on the yellow metal. The uptrend remains intact, as the geopolitics within the United States remains prevalent, following President Trumps State of the Union Speech on Tuesday evening. Press reports that stated the ECB is not convinced that the European economy needs another round of quantitative easing.
Gold prices moved sideways trading in a tight range following Tuesday inside day which reflected indecision. Support is seen near the 10-day moving average at 1,309. Resistance is seen near the January highs at 1,365. Medium term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.
ECB Not Convinced They Need Another TLTRO
Reports says that ECB is not yet convinced of the need for another round of loans to boost stimulus. This would seem to rule out the March 7 meeting for any announcements of a new operation. Economic weakness in the eurozone economy is likely to tip the ECB eventually into a more dovish policy stance. Germany reported weak December factory orders. Orders tumbled 1.6% versus expectations that they would increase by 0.3% month over month. This dragged the year over year rate down to -7.0% from a revised -3.4% in November.
President Trump gave his State of the Union address on Tuesday evening. This is usually a PR exercise, and last night was no different. Despite reports that Trump would lay out plans to declare a state of emergency over border wall funding, he instead stuck to the script.
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This article was originally posted on FX Empire
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