Gold Prices Dip as US Dollar Strengthens
- Gold Prices Dip From Highs as US Dollar Strength Rebounds
- Next Daily Support For Gold Prices Found at $1,226.23
- Looking for additional trade ideas for Gold and the US Dollar? Read Our 2017 Market Forecast
Gold Prices have dipped as the US Dollar gains strength ahead of this morning’s USD ISM Manufacturing data. Expectations for today’s event are set at 56.2, and as a high importance event its release is expected to directly affect US Dollar priced assets including Gold.
Technically, gold prices have declined substantially after trading to yearly highs earlier in the week at $1,264.06. Now, prices are trading back below their 10 day EMA (exponential moving average), which is found at $1,244.54. A daily close below this average should be considered as a bearish turn in the market, and traders should note that gold prices have not closed below this line since January 30th of this year. If prices decline further, on continued US Dollar strength, gold traders may begin looking for support near the February 21st low of $1,226.23.
Gold Price & Averages
Technically, the US Dollar is trading off of newly created monthly highs at 101.80. This high is significant as it places the US Dollar above a key value of resistance found at 101.69, and also ends an ongoing consolidating triangle pattern on the chart. If the US Dollar continues to rally, traders may find the next value of daily resistance may be found near the January 11th high at 102.93.
It should also be noted that the US Dollar remain well above their 10 day EMA at 101.20, which should be considered as a value of ongoing support. In the event that the US Dollar turns lower on today’s news, traders should look for the market to trade back toward this average. In a bearish US Dollar scenario, prices should form a long wick reconfirming the previous point of resistance referenced at 101.69. Also in the event that the US Dollar gives back its previous gains, traders should reasonably expect gold prices to rally eliminating its prior daily losses.
US Dollar Basket with Averages
--- Written by Walker, Analyst for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.