News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACyvdZ https://t.co/6VjW5FEiQW
  • Global stocks bounce back from recent pullback as key resistance levels lie ahead. Get your weekly equities forecast from @HathornSabin here: https://t.co/wXSWo1JygD https://t.co/vWVaSEQTXT
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9FlspUVZz https://t.co/9kfBu04auM
  • Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic. Learn how you can control FOMO in your trading here: https://t.co/lgDf5ddzFV https://t.co/8GJ6OQYgnW
  • Bitcoin (BTC) started the day on the front foot on the Twitter news before the latest China crypto ban hammered the market lower. Get your weekly crypto forecast from @nickcawley1 here: https://t.co/ZKHGXeVhsR https://t.co/QSltMQml6N
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/DSp7f3YuAx
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/HNqHcbL6vk
  • The US Dollar continues to push higher against ASEAN currencies after the FOMC rate decision. This leaves the USD/SGD, USD/THB, USD/PHP and USD/IDR outlook mostly tilted higher. Get your market update from @ddubrovskyFX here:https://t.co/zn56iTFBxM https://t.co/FbepD4RaFg
  • The US Dollar seems to be back on the offensive against its major counterparts, pressuring EUR/USD and NZD/USD lower as USD/JPY consolidates. USD/CHF surges past key resistance. Get your market update from @ddubrovskyFX here:https://t.co/MrLGSp7FYa https://t.co/XS0176LyOg
  • The Japanese Yen remains in focus with strength potential on risk aversion themes to go along with weakness on themes around higher rates. Get your weekly $JPY technical forecast from @JStanleyFX here: https://t.co/l4UICqJzJy https://t.co/dQ2pS0E4fp
Gold Price Rebounds from Key Price Zone as Fed Deploys Credit Facility

Gold Price Rebounds from Key Price Zone as Fed Deploys Credit Facility

David Song, Strategist

Gold Price Talking Points

The price of gold attempts to retrace the decline from earlier this month as the Federal Reserve takes additional steps to combat COVID-19, and the precious metal may continue to consolidate as the global community of central banks stand ready to deploy unconventional tools in order to curb the weakening outlook for growth.

Gold Price Rebounds from Key Price Zone as Fed Deploys Credit Facility

The price of gold may extend the rebound from the monthly low ($1451) as the Federal Reserve establishes a Primary Dealer Credit Facility (PDCF), with the operations to “offer overnight and term funding with maturities up to 90 days.”

The announcement comes as the 3-month US Dollar LIBOR rate jumped 16.25bp to mark the biggest rise since 2008, and the Federal Open Market Committee (FOMC) may continue to respond to the coronavirus as the PDCF will be “in place for at least six months and may be extended as conditions warrant.

The efforts by the FOMC and its counterparts should help to cushion the world economy from the shock to the global supply chain, and it seems as though major central banks will deploy unconventional tools to fight the outbreak as the Reserve Bank of Australia (RBA)stands ready to purchase Australian government bonds in the secondary market to support the smooth functioning of that market.”

It remains to be seen if the rate easing cycle will produce unintended consequences as the RBA warns that “a further reduction in interest rates could encourage additional borrowing at a time when there was already a strong upswing in the housing market,” but the price of gold may continue to benefit from the low interest environment as market participants look for an alternative to fiat-currencies.

With that said, the broader outlook for bullion remains constructive as the reaction to the former-resistance zone around $1450 (38.2% retracement) to $1452 (100% expansion) helped to rule out the threat of a Head-and-Shoulders formation, and the recent reaction to the key price zone may generate a lager rebound in the price of gold as the Relative Strength Index (RSI) appears to be reversing course ahead of oversold territory.

Sign up and join DailyFX Currency Strategist David Song LIVE for an opportunity to discuss potential trade setups.

Gold Price Daily Chart

Image of gold price daily chart

Source: Trading View

  • The opening range for 2020 instilled a constructive outlook for the price of gold as the precious metal cleared the 2019 high ($1557), with the Relative Strength Index (RSI) pushing into overbought territory during the same period.
  • A similar scenario materialized in February, with the price of gold marking the monthly low ($1548) during the first full week, while the RSI broke out of the bearish formation from earlier this year to push back into overbought territory.
  • However, the price of gold has failed to maintain the monthly opening range for March after trading to a fresh yearly high ($1704), with the Relative Strength Index (RSI) signaling a potential change in gold price behavior as the oscillator deviates with price and snaps the upward trend carried over from last year.
  • However, the reaction to the former-resistance zone around $1450 (38.2% retracement) to $1452 (100% expansion) may produce range bound conditions as the RSI reverses course ahead of oversold territory, with a break/close above the $1558 (38.2% expansion) to $1567 (161.8% expansion) regionopening up the Fibonacci overlap around $1587 (61.8% retracement) to $1592 (50% expansion).

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES