By Mexgroup.com
Gold Trading In The Red
The yellow metal dropped significantly and resume the corrective phase. Is trading in the red even if buyers have stepped in and have pushed it above the $1306.50 per barrel. Gold decreased as the USD has managed to rebound and to recover versus all its rivals.
The USDX registered an amazing jump and is trading above the 93.30 level. The dollar index is almost to reach and retest a strong dynamic resistance, where he can find resistance again. A further USDX’s increase will weaken the Gold even more.
Gold increased a little right after the United States data was released, but fundamentally should drop much deeper as the figures have come better than expected.
The Unemployment Claims increased from 235K to 236K in the previous week, has come in better versus the 237K estimate, while the Core PCE Price Index rose by 0.1%, matching expectations and the 0.1% growth in the former reading period.
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The Personal Spending rose by 0.3%, less versus the 0.4% estimate, but the Personal Income surged by 0.4%, exceeding the 0.3% estimate.
You can see that the price has found strong resistance right below the warning line (WL1) of the major descending pitchfork and now has tried to retest the 23.6% retracement level, which represents an important static support.
The perspective remains bullish despite the minor decrease, technically is expected to climb much higher in the upcoming period after the breakout from the extended sideways movement.
Brent Should Hit New Lows
Price increased today and is fighting hard to recover after the impressive drop, but I’m afraid that is only a temporary rebound. Brent is expected to drop after the breakdown from the minor ascending channel.
The next downside target will be at the 50% retracement level, most likely will hit the sliding line as well. Actually, it could be attracted by the confluence between these two.
GBP/JPY Upside Paused
GBP/JPY reached new highs today, but wasn’t able to stay near the 142.88 today’s high and now is trading in the red. Could retest the upper median line of the minor descending pitchfork before will resume the upside movement. We’ll see how long the rebound will go because has reached and important resistance area.
By Olimpiu Tuns
Market Analyst
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By MEX Group Team
Source: http://en.mexgroup.com/blog/daily-market-report-gold-focused-correction-august-31-2017/
