GOLD, DAX 30, HANG SENG INDEX OUTLOOK:
- Gold prices jumped 2% toward the US$ 2000 figure as the US Dollar weakened
- DAX 30 climbed marginally to 12,930, facing a key resistance at 13,000
- Hang Seng index may move higher after yesterday’s rally; Shanghai stocks jumped
Gold Price Outlook:
A weakening US Dollar is sending gold prices higher, after an extremely volatile week. Gold prices surged fiercely on Monday to US$ 1,989 before cooling off slightly to US$1,980 this morning. The overall trend remains bullish on the daily chart, with the 20-, 50- and 100-Day Simple Moving Average (SMA) lines trending up nicely.
The metal has been ranging between US$ 1,910-1,970 after two extremely volatile sessions seen last Wednesday and Thursday. This week, investors are eyeing Wednesday’s Federal Reserve meeting minutes and a review of the phase-one US-China trade deal for clues about the inflation outlook, central bank policy guidance and geopolitical prospects.
The mid- to long-term outlook of gold prices remains bullish against the backdrop of ultra-loose monetary policy as well as geopolitical and pandemic risks.
The US Dollar Index resumed its downward trajectory to 92.85 on Tuesday morning, facing immediate support level at 92.55.
Gold Price – Daily Chart
DAX 30 Outlook:
Germany’s DAX 30 stock index climbed 0.15% alongside a broad rally in European shares on improved risk sentiment. The benchmark is trending up nicely from the trough observed in late March this year, gaining 62% since then.
Sector-wise, information technology (+0.98%), utilities (+0.68%) and healthcare (+0.54%) were among the best performers, whereas communication services (-1.21%), financials (-0.37%) and materials (-0.26%) were lagging.
DAX 30 Sector performance 17-8-2020
Source: Bloomberg, DailyFX
Technically, the DAX came to a key resistance at 13,000 – the previous high seen in end July and mid-August. Its overall trend remains bullish, as suggested by upward-sloped 20-Day, 50-Day and 100-Day SMA lines. Breaking above 13,000 would likely make room for more upside towards 13,800 – the all-time high.
Dax Index – Daily Chart
Hang Seng Index Outlook:
Hong Kong’s Hang Seng Index (HSI) stock benchmark rallied over 1% on Monday, boosted by ‘risk-on’ sentiment in the mainland China A-share market. The Shanghai Composite surged 2.43% with higher trading volume, suggesting that bullish sentiment is prevailing.
Sector-wise, information technology (+1.55%), energy (+1.38%), financials (+1.1%) were among the leading sectors, whereas consumer discretionary (-0.53%) and communication services (-0.32%) were lagging.
Technically, HSI has broken out of a descending channel last week and attempted a bullish reversal. Its immediate support and resistance levels can be found at 25,200 (38.2% Fibonacci retracement) and 25,860 (23.6% Fib) respectively.
Hang Seng Index – Daily Chart
--- Written by Margaret Yang, Strategist for DailyFX.com
To contact Margaret, use the Comments section below or @margaretyjy on Twitter
