Leave us a note and we will get back to you for a free consultation
Gold prices were ending higher overnight as risk-off tone saw investor demand for the safe-haven. Further
However, gold has been under slight pressure since dropping from the highs and is now consolidating on Wednesday.
XAU/USD is starting out flat after falling from the highs of the prior day of $1,815.04 and dropping to close on Wall Street at $1,797.21, albeit up from the lows of $1,790.15.
Declines in inflation-adjusted Treasury yields have also provided some support.
The greenback resurged on Tuesday following the long weekend in the US as investors got beyond the Nonfarm Payrolls mixed report.
The dollar stayed on top even though US services ISM survey fell to 60.1 (vs. estimates of 63.5, prior 64.0).
Instead, the greenback was firmer as traders positioned themselves ahead of Wednesday’s Federal Reserve minutes from the pivotal June meeting where first taper discussions took place.
The market is awaiting more confirmation clues of the opinions of FOMC members on when tapering will begin. A more hawkish spin within the minutes from the members would be expected to support the greenback higher, especially in the wake of disappointing data from Europe on Tuesday.
The dollar pretty much reclaimed all of the losses and which have been put down to profit-taking overnight.
Friday’s high in the DXY near 92.741 is still intact but on a break of there, bulls will be hunting down the 93 areas ahead of the March 31 high near 93.437.
Traders will be on the lookout for a more hawkish spin from the Fed members.
The US dollar could firm further, especially in the wake of disappointing data from Europe on Tuesday which tarnished the allure for the euro ( by far, the largest component of the DXY index, making up almost 58 per cent (officially 57.6%) of the basket).
Meanwhile, however, analysts at TD Securities remain bullish.
”Following a multi-month hiatus, Central Banks have proven to be a crucial pillar of support for gold’s bull market at much needed time in recent months, with an increase in official purchases coinciding with periods in which gold trades near its pandemic-era trendline,” the analysts explained.
”As the world exits from the pandemic with a massive stock of debt, alongside closer coordination between governments and their respective central banks, nations may increasingly seek to add to their gold reserves.”
Technically, the 1,808 level was taken out as being the 38.2% Fibo of the last daily bearish impulse which has a confluence with the 13th May lows.
1,845 is the 61.8% Fibo as a key upside target. 1,785 is the critical support at this juncture.
The USD/JPY currency pair has traditionally had a close correlation with U.S. Treasuries. When interest rates head higher, Treasury bond prices go down, which lifts the U.S. dollar, strengthening USD/JPY prices.
A foreign exchange correlation is the connection between two currency pairs. There is a positive correlation when two pairs move in the same direction, a negative correlation when they move in opposite directions, and no correlation if the pairs move randomly with no detectable relationship.
You can trade on forex pair correlations by identifying which currency pairs have a positive or negative correlation to each other. In the conventional sense, you would open two of the same positions if the correlation was positive, or two opposing positions if the correlation was negative.
A good rule of thumb for traders new to the market is to focus on one or two currency pairs. Generally, traders will choose to trade the EUR/USD or USD/JPY because there is so much information and resources available about the underlying economies. Not surprisingly, these two pairs make up much of global daily volume.
The major currency pairs on the forex market are the EUR/USD, USD/JPY, GBP/USD, and USD/CHF. The four major currency pairs are some of the most actively traded pairs in the world, along with the so-called commodity currency pairs: USD/CAD, AUD/USD, and NZD/USD.
Supply and Demand Trading is the most Profitable Forex Strategy as long as you are able to understand Price Action. If you don’t care about the Price Action, you can add in the chart everything you want.
What is the buy the dip day trading strategy? This is the easiest day trading strategy out there! The buy the dip day trading strategy is a trend following strategy where a trader looks to buy a small pullback in the overall upside trend.