Two trades to watch: Gold, DAX
Fiona Cincotta June 4, 2021 2:27 PM
Gold finds support on ascending trend line and looks towards US jobs data for further clues. The Dax futures head a few points lower but uptrend remains in place. Eurozone retail sales up next.
Gold looks to NFP report after strong ADP numbers
Gold prices continue to slide versus the US Dollar.
The greenback gained momentum yesterday after Fed taper talk and strong economic data prompting speculation that the US recovery is gathering pace.
ADP private payroll numbers came in well ahead of forecast at 978k (vs 650k expected) & after initial jobless claims fell to a fresh pandemic low of 385k. Separately the ISM non-manufacturing PMI surpassed forecasts at 64 as business activity ramps up.
All eyes are now on the NFP which is expected to show 650k jobs created in May and the unemployment rate is expected to slip to 5.9%.
Where next for Gold prices?
Gold appears to have found support on its ascending trendline dating back to the year to date lows in March. This trendline now acts as a key support and pivotal point. A move below this level at 1855 then exposes the 200 day ma at 1840. Sustained weakness below this level could open the door to 1815 ahead of 1800 round number and 50 day ma.
On the upside, should the ascending trend line support hold, resistance can be seen at 1875 late January high, ahead of 1900 round number and 1915 June high.
Dax edges lower, uptrend remains intact
European bourses are trading under pressure following tech led declines on Wall Street.
A trio of upbeat US labour market data fueled expectations of a stellar NFP number today and concerns that the Fed could move to tighten monetary policy earlier.
Eurozone retail sales for April are expected to show -1.2% MoM contraction, after jumping 2.5% in March.
Declining covid numbers in Germany, rising vaccine numbers and the easing of pandemic restrictions is underpinning sentiment.
Where next for the Dax?
The Dax failed in the previous session to extend through Tuesday’s all time high of 15690. Whilst the Dax futures are edging a few points lower ahead of the open, the sellers are not taking control of the overall trend which is bullish.
It would take a close below 15400 for the bears to negate the near term up trend. 15280, the confluence of the ascending trendline dating back to late October and the 50 day ma could also prove to be a tough nut to crack.
How to trade with City Index
Follow these easy steps to start trading with City Index today:
- Open a City Index account, or log-in if you’re already a customer.
- Search for the market you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
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.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX 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), StoneX Financial 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 StoneX Financial 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 StoneX Financial 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.
StoneX Financial 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.