Gold prices rallied following the signing of the US-China trade deal. Surprisingly Chinese networks reported that the lack of President Xi not attending the signing pointed the blame at the number 2. US yields eased as riskier assets continued to gain traction, which put downward pressure on the dollar. This paved the way for higher gold prices.
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Gold prices pushed higher and sliced through short term resistance near the 10-day moving average which is now support near 1,554. Target resistance is now seen near the January highs at 1,611. Additional support on gold prices is seen near the November highs at 1,517. This appears to be part of a bull flag continuation pattern. The issue is the range given that $1,611 is far away.
While short term daily momentum mixed as the fast stochastic is also accelerating lower. The daily RSI on the other hand is curling higher reflecting decelerating negative momentum. The daily MACD is poised to generate a crossover sell signal, as the MACD line fast approaches the MACD signal line. The MACD histogram is poised to slice through zero index level which is also considered a crossover sell signal.
The US and China sign the first phase of a trade deal which includes roughly $200 billion in Chinese purchases of American goods and services over the next two years. Beijing agreed to step up orders of soybeans, pork and other U.S. farm products by $32 billion, of manufactured goods by around $80 billion, of energy products by some $50 billion and of services by about $35 billion
This article was originally posted on FX Empire
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