DXY and XAU/USD holding key levels after BOE
Joe Perry February 4, 2021 9:57 PM
Gold and the DXY typically move inversely to each other.
The DXY has been on a tear lately, moving from 90.00 to 91.50 since January 22nd. Today alone the US Dollar index moved from 91.09 up to 91.485. The DXY hit resistance just as the BOE announced it was leaving rates unchanged and didn’t intend to signal that they were going to raise rates in the future. As a result, GBP screamed higher. The DXY took the brunt of the GBP move and pulled back. Intraday support is now at 91.24 and 90.98. Bulls will be looking to fade the pullback in DXY and buy near these levels. Strong horizontal resistance is above at the day’s’ highs of 91.485.
Source: Tradingview, City Index
Conversely, Gold (XAU/USD) has been moving lower since the beginning of the year. Gold and the DXY typically move inversely to each other. Today was no exception. As DXY moved higher, gold moved lower and is currently testing near-term trendline support at 1808. The next level of support is 1802.69, the lows of January 17th and the 1800 psychological round number. Resistance isn’t until 1830. If price does bounce intraday, expect Gold bears to be selling near those levels. Gold bulls will be buying near the confluence of support between 1800 and 1810. Note that on a 240-minute timeframe, the RSI is oversold , which may indicate the precious metal is ready for a bounce.
Source: Tradingview, City Index
Learn more about forex trading opportunities.
Learn more about gold and silver trading opportunities.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.