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Forex Trading

The trading week in retrospect.

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Ahead of the end of the trading week, the US dollar was the dominating theme in markets, and it had several drivers. The world’s largest economy has been showing more signs of weakness and traders of opposing pairs capitalized on its weakness. US politicians have also failed to agree on a new relief package – triggering a fiscal-cliff in special federal employment benefits.

Gold spiked to new highs amidst reports that the president of the United States, Donald Trump was considering postponing the elections. An idea that was quickly dismissed by the US congress.

The US Gross Domestic Product has plunged by 32.9% annualized, which surprisingly is better than expected but is still the worst in history. The Federal Reserve also announced that some special lending schemes will be extended through year-end – showing the bank’s commitment to non-stop support towards reviving the economy.  

From the look of things, It seems that Fed Chair Powell and his colleagues prefer Congress to lead – using their spending powers, which the Federal Reserves does not possess. Republicans and Democrats were at odds over injecting further stimulus packages – especially the all-important federal unemployment benefits. Depressed US bond-yields – regardless of YCC – have also been weighing on the dollar.

The novel Coronavirus statistics remains worrying, with daily deaths rising well above 1,100. Hopes for a vaccine remains alive with Moderna  kicking off its Phase 3 trial, racing against AstraZeneca and the University of Oxford. These actions may have pushed the safe-haven dollar down – and it had already been unwinding the risk-aversion trade.

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Forex Trading

Gold aiming for new highs.

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Gold is ready to take out a powerful resistance at $1862, which is the intersection of the previous day high and Fibonacci 38.3% one-day.

Up next, a dense cluster of major resistance levels is put up around $1862, where the Fibonacci 23.7% one-week, SMA100 four-hour and SMA100 one-hour coincide.

The buyers will then target the SMA50 one-day at $1870.

Meanwhile, a lack of healthy support levels makes gold look vulnerable, with an immediate cushion seen around $1848, which is the convergence SMA100 and 50 one-hour and SMA10 four-hour.

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Forex Trading

XAUUSD eyeing upside above $1916

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Risk sentiments joins the precious metal’s ability to stay beyond 50-day Simple moving average to attack the 100-day Simple moving average level of usd1,904.54. However, any further upside will eye for a multi-day-old resistance line around usd1,917.

Should gold buyers manage to cross usd1,918 on a daily closing basis, November’s high near usd1,965/67 will be in the spotlight.

Meanwhile, a downside break of 50-day simple moving average, at usd1,871 now, will attack an upward sloping trend line from November 30, currently around usd1,843.

If at all the commodity sellers dominate past-usd1,843, the monthly low near usd1,776 may return to the charts

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Forex Trading

Gold sees heavy loss.

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The precious metal picks up bids around usd1,840, up 0.21% intraday, during early Thursday. The yellow metal marked the heaviest losses since November 24 the previous day but 200- hourly moving average triggered the much-awaited bounce.

The U-turn gains support from the receding strength of negative monthly average convergence divergence signals to suggest further upside towards 100-hourly moving average , at usd1,852 now.

However, a downward sloping trend line from Tuesday, near usd1,857 now, will challenge gold buyers ahead of highlighting the recent top surrounding usd1,876 on their radars.

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