Summary:
- Forex markets remained range-bound as more and more investors became uncertain about the future path of the interest rates in the United States of America due to divided Fed.
- Gold inched higher in the short term after Barcelona terrorist attack. But overall, the price continued to consolidate at highs.
The dollar index closed slightly higher Thursday (17 August). The greenback started to fell back in New York session after a brief recovery from previous trading day in Asian and London sessions. Gold inched up in the short term after the rise in risk aversion sentiment caused by Barcelona terrorist attack last night. However, gold prices maintained consolidation at highs on the day. Whether or not forex and the gold could maintain their respective wide-range trading on Friday will be important to observe.
Technical
The dollar index (DXY) continued consolidation below its EMA30 resistance on the daily chart. Its short term moving averages tended to contracting and flattened while its still-declining and diverging long term moving averages offered strong resistance. It will be interesting to watch when the index is going to complete its consolidation.
As to non-U.S. currencies, the European currencies continued consolidation in a choppy session, with the euro and pounding both waiting for dictation in the short term. As far as macro pointers are concerned, the decrease in U.K. retail sales (YoY) and unchanged final figure for EU CPI (YoY) had little impacts on markets on the back of more and more investors became uncertain about the future path of the interest rates in the United States of America due to divided Fed. The Australian dollar and Canadian dollar, both regarded as the commodity currency, staged significant pull-backs, in stark contrast to the EU currencies. Whether or not the ongoing daily trend could change will be important to observe.
Now let us take a look at precious metals. Gold consolidated between 1289—1283.5 in most of the session, with bearish divergence in MACD indicator on the 1 hour chart. Its short term moving averages turned higher again, with faded momentum, well above its diverging long term averages which turned bullish in a steady state and could offer support to the price. Whether or not the price could retest H1-period EMA30 on the day will be important to observe. Its upside resistances to watch stand at around 1292 follow by 1295.8.
Disclaimer: The views and opinions expressed in this article are those of the authors and for the purpose of reference only, and shall not be relied upon by investors in making any trading decisions.