Gold prices rebounded on Wednesday as the dollar dipped, paving the way for a relief move in gold prices. Gold broke down through trend line support on Tuesday and then rebounded forming a doji day. Prices are oversold as the fast stochastic is printing a reading of 19, below the oversold trigger level of 20, which could foreshadow a correction. Resistance is seen near the former breakdown level near an upward sloping trend line near 1,308. Support is seen near the December 2017 at 1,240. Softer than expected U.S. housing starts allowed yields to decline easing demand for the dollar and allowing gold to rebound.
U.S. April housing starts fell 3.7% to 1.287 million after rising 3.6% to 1.336 million which was revised from 1.319 million. Building permits declined 1.8% to 1.352 million following the 4.1% gain to 1.377. Starts were lower in the Northeast, the Midwest and West, but higher in the South. Single family starts rose 0.1% to 0.894 million after a 0.8% drop to 0.893 million which was 0.867 million. Multifamily starts plunged 11.3% to 393 million after climbing 13.6% to 0.443 million which was 0.452 million. Housing completions grew 2.8% to 1.257 million after falling 5.1% to 1.223 million which was 1.217 million.
Eurozone April HICP inflation Dipped
Eurozone April HICP inflation was confirmed at 1.2% year over year, down from 1.3% year over year in March. Core inflation also came in unchanged from the preliminary reading at 0.7% year over year, down from 1.0% year over year in March. The breakdown showed the energy price inflation accelerated in April, and services price inflation fell back to 1.0% year over year from 1.5% year over year. The latter is likely due to temporary factors and the earlier timing of Easter this year, which saw holiday related price increases for package holidays in particular, falling back earlier.
This article was originally posted on FX Empire
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