Gold Price Analysis: Despite Powell's bombshell gold is still higher on the day

Gold is trading 0.55% higher on Wednesday despite some greenback strength in the US session.
Price still unable to break above the pattern seen on the 4-hour chart.

Rajan Dhall, MSTA FX Daily

Fundamental backdrop

Today has been another bumper session with lots of news. The comments from Fed Chair Powell were the main event. As expected, Powell confirmed that the Fed is not "looking at" negative rates at the moment. He went on to say that the evidence on negative rates is very mixed and concern over them is interrupting intermediation. The futures markets have reduced their bets on negative rates but there is still the suggestion that they will need to reassess the situation if there is a second wave of the virus.

That was not the end of the central banks' speaks today as ECB's de Guindos said the Eurozone has already reached its lowest level in terms of economic activity. Slightly presumptuous as once again I am not sure he could forecast the second wave of infection and if the virus could mutate to something more serious. He added that it will take up to two years to the EU to fully recover and get back to the situation previous to the current shock.

In Washington, Trump was on the offensive once again extending the executive order aimed at Huawei and ZTE (Chinese companies). Elsewhere, Washington also extended its stay at home order through to June 8th.

Equities have not reacted well to events in the session, with all of the major indices down over 2%. The DAX is also down over 2.5% on the session.

Technical picture

The trendline on the 4-hour chart below is a thing of beauty. The technical levels are often well respected in the yellow metal. The market is stuck between a rock and a hard place on Wednesday. The USD strength has outweighed the bearishness in stocks and gold is in full consolidation mode for now. It will be interesting when the USD starts to weaken. If gold breaks the pattern at that stage, it will tell us lots about the positioning.

Additional levels

XAU/USD

Overview
Today last price	1710.54
Today Daily Change	8.06
Today Daily Change %	0.47
Today daily open	1702.48

Trends
Daily SMA20	1705.31
Daily SMA50	1649.13
Daily SMA100	1608.59
Daily SMA200	1550.42

Levels
Previous Daily High	1711.09
Previous Daily Low	1693.76
Previous Weekly High	1723.7
Previous Weekly Low	1682.3
Previous Monthly High	1747.82
Previous Monthly Low	1568.46
Daily Fibonacci 38.2%	1704.47
Daily Fibonacci 61.8%	1700.38
Daily Pivot Point S1	1693.8
Daily Pivot Point S2	1685.11
Daily Pivot Point S3	1676.47
Daily Pivot Point R1	1711.13
Daily Pivot Point R2	1719.77
Daily Pivot Point R3	1728.46

Author

Rajan Dhall, MSTA

FX Daily

Rajan Dhall is an experienced market analyst, who has been trading professionally since 2007 managing various funds producing exceptional returns.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.