XAUUSD, H4 & Daily
The U.S. Q4 GDP growth boost to 2.9% from 2.5% slightly beat our estimate thanks to unexpected boosts to non durable and service consumption that more than offset an unexpected downward bump of $1.7 bln for net exports. We otherwise saw expected $7.6 bln hike for inventories with more modest boosts for private and public construction that left final sales growth of 3.4% (was 3.3%). The big Q4 inventory subtraction reversed the Q3 bounce, leaving an anemic inventory path since Q1 of 2015 as high I/S ratios continue to unwind. The small $15.6 (was $8.0) bln Q4 accumulation rate should be followed by a larger Q1 rate that we peg at a more sustainable $51 bln, before a likely Q2 final sales bounce with a fiscal boost to growth that will depress inventory growth once again. Beyond inventories, the Q4 GDP figures show solid growth in consumption, fixed investment and government purchases, with likely boosts from hurricane and fire rebuilding, alongside robust growth in both exports and imports with help from rebounding global growth.
Gold traded lower again today to lows of the week, bottoming so far at $1,331.93, after printing six-week highs of $1,356.85 on Tuesday. A bit of dollar strength prompted position squaring, which has seen the contract head back close to its 50-day SMA, currently at $1,331.48. The Daily technical indicators, continue to send bearish signals, indicating that the weakness in the market is not over yet. The RSI is pointing to the downside, near neutral zone, while MACD supports a bearish picture as well, since it remains negative. Stochastics libes are not yet into the oversold territory but they crossed below the overbought territory.
In the 4-hour chart, the asset seems to formed a Head and Shoulders pattern, since Friday, with a neckline area at 1,338.40-1,339.80. The XAUUSD broke significantly below the neckline area and the latest swing low at 1,338.40. It additionally manage to broke the last hour the 50-period EMA as well, at 1,335.60. Hence this breakouts along with the technical bearish picture of the instrument, raising the chances for further declines. The RSI is at 40, looking ready to cross below 30, while MACD continues to decrease the positive momentum below its red-signal line, suggesting that upside movement is running out of steam.
Given overall market nerves on trade, tech stocks, and geopolitics, including North Korea and Russia, dip buying can be expected to continue in XAUUSD. Hence a Short position in long term has been triggered at 1,335.60, with Targets at 1,326.40 and 1,316.30. Support comes art 1,343-1,348.00 area.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:
[ujicountdown id=”Next Webinar” expire=”2018/03/29 12:00″ hide=”true” url=”” subscr=”” recurring=”” rectype=”second” repeats=””]
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
