FX TALKING POINTS:
– Gold Price Outlook Mired by Bearish Outside-Day (Engulfing) Candle. Relative Strength Index (RSI) Flops Ahead of Overbought Territory.
USD/JPY REBOUND FIZZLES FOLLOWING DISMAL U.S. CONSUMER CONFIDENCE SURVEY.
USD/JPY struggles to safety a allege from progressing this week as a U.S. Consumer Confidence consult suddenly narrows in March, yet updates to a 4Q U.S. Gross Domestic Product (GDP) news might eventually fuel a near-term miscarry in dollar-yen should a uninformed total inspire a Federal Open Market Committee (FOMC) to broach 4 rate-hikes in 2018.
The final rider to a GDP news is approaching to uncover an uptick in a enlargement rate, with a economy projected to grow an annualized 2.7% contra an initial foresee of 2.5%. A collection of certain developments might worsen a seductiveness of a greenback as it raises a Fed’s operation to extend a hiking-cycle, and a FOMC might ready U.S. households and businesses for an approaching rate-hike as ‘the Committee expects that mercantile conditions will develop in a demeanour that will aver serve light increases in a sovereign supports rate.’
However, another set of below-forecast prints might continue to criticise a near-term miscarry in USD/JPY, with a span during risk of confronting choppy prices as marketplace appearance is expected to skinny forward of a Easter holiday.
USD/JPY DAILY CHART
- Near-term opinion for USD/JPY is apropos dark with churned signals as a span pulls behind from a weekly-high (105.90) and struggles to extend a new array of aloft highs lows.
- Keeping a tighten eye on a Relative Strength Index (RSI) as it continues to reason above oversold territory, with a oscillator during risk of melancholy a bearish formations carried over from a prior year as it start to separate with price.
- Failure to reason above a 105.40 (50% retracement) might furnish range-bound conditions for USD/JPY, with a 104.10 (78.6% retracement) to 104.20 (61.8% retracement) behind on a radar as a near-term miscarry in a sell rate fizzles.
GOLD PRICE OUTLOOK MIRED BY BEARISH OUTSIDE-DAY (ENGULFING) CANDLE.
Gold prices are behind underneath vigour following a unsuccessful try to exam a February-high ($1362), and a changed steel might face a incomparable pullback going into a finish of a month as a bearish outside-day (engulfing) takes shape.
Bear in mind that bullion pennyless out of a near-term operation even as a Federal Open Market Committee (FOMC) delivered a 25bp rate-hike on Mar 21, and a broader opinion stays constructive as both cost and a Relative Strength Index (RSI) snap a bearish formations carried over from progressing this year. It seems as yet a Fed’s preset march for financial process will continue to seaside adult bullion prices as Chairman Jerome Powell and Co. steadfastly foresee a neutral Fed Funds rate of 2.75% to 3.00%, yet new cost movement warns of range-bound conditions as a allege from a monthly-low ($1303) starts to unravel.
With that said, a changed steel might connect going into April, with bullion during risk of confronting serve waste over a entrance days as it breaks a array of aloft highs lows from a prior week.
XAU/USD DAILY CHART
- The new array of unsuccessful attempts to exam a $1359 (61.8% expansion) jump raises a risk for a incomparable pullback, with a break/close next $1341 (78.6% expansion) bringing a downside targets behind on a radar generally as a RSI flops forward of overbought territory.
- Next downside segment of seductiveness comes in around $1328 (50% expansion) followed by a Fibonacci overlie around $1312 (61.8% expansion) to $1315 (23.6% retracement), with pivotal support entrance in around $1297 (23.6% retracement) to $1302 (50% retracement), that sits only underneath a monthly-low ($1303).
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— Written by David Song, Currency Analyst
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