.Gold Price Prediction – Prices Rally Post Trade Agreement Signing
Gold Price Prediction – Prices Rally Post Trade Agreement Signing
David Becker FX Empire January 15, 2020,
Gold prices rallied following the signing of the US-China trade deal. Surprisingly Chinese networks reported that the lack of President Xi not attending the signing pointed the blame at the number 2. US yields eased as riskier assets continued to gain traction, which put downward pressure on the dollar. This paved the way for higher gold prices.
Technical Analysis
Gold prices pushed higher and sliced through short term resistance near the 10-day moving average which is now support near 1,554. Target resistance is now seen near the January highs at 1,611.
Additional support on gold prices is seen near the November highs at 1,517. This appears to be part of a bull flag continuation pattern. The issue is the range given that $1,611 is far away.
While short term daily momentum mixed as the fast stochastic is also accelerating lower. The daily RSI on the other hand is curling higher reflecting decelerating negative momentum.
The daily MACD is poised to generate a crossover sell signal, as the MACD line fast approaches the MACD signal line. The MACD histogram is poised to slice through zero index level which is also considered a crossover sell signal.
The US and China sign the first phase of a trade deal which includes roughly $200 billion in Chinese purchases of American goods and services over the next two years.
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YEN SURGE SHAKES THE $2.35 TRILLION CARRY TRADE: JAPAN’S CURRENCY REVERSAL COULD REPRICE GLOBAL CAPITAL FLOWS
Japan’s rapidly strengthening yen is forcing investors to reconsider one of the world’s largest funding trades, raising the possibility of broader shifts in global liquidity, asset prices and capital flows.
OVERVIEW
The yen has surged nearly 4% in about a week, reaching a seven-month high as markets increasingly expect the Bank of Japan to raise interest rates.
Cross-border yen borrowing — a proxy for the carry trade — reached a record 360 trillion yen, or approximately $2.35 trillion, in March, according to Jefferies analysis of Bank for International Settlements data.
A sustained yen rally could force investors to unwind leveraged positions and repatriate capital, potentially affecting currencies, bonds and other global assets.