Yahoo Finance Gold Shoots Higher as Dollar Fumbles
The precious metal marched into June on an incredibly bullish note, blasting through the psychological $1300 level thanks to a broadly weaker Dollar. Market expectations over the Federal Reserve cutting interest rates this year amid persistent trade disputes are likely to dent buying sentiment towards the Dollar – ultimately pushing Gold prices higher. With the precious metal already powering to a nine-week high above $1335 this morning, the next key level of interest may be found around $1347.
In regards to the technical picture, Gold turned bullish on the daily charts following the breakout and daily close above the $1324 resistance level. Previous resistance around the point is likely to transform into dynamic support that encourages a move higher towards $1347 and $1350, respectively.
Dollar crippled by Fed rate cut hopes
The Dollar is extending losses against a basket of major currencies on rising expectations over the Federal Reserve cutting interest rates in response to ongoing US-China trade tensions.
Earlier in the week, St. Louis Fed President James Bullard said that a rate cut “may be warranted soon” which immediately sent the Dollar tumbling. Recent comments from Fed Chair Jerome Powell on how the central bank would act “as appropriate” to address trade war risks simply rubbed salt into the wound with the Dollar Index sinking below 97.00 as of writing. Speculation over the Fed cutting interest rates in 2019 coupled with fresh signs of the US economy hit by trade disputes should cap the Dollar upside potential. Price action suggests that bears are back in town with the Dollar Index on route to test 96.50 if a daily close below 97.00 is achieved.
Pound rallies on shaky foundations
Investors should keep in mind that the recovery in the GBPUSD has little to do with a change of sentiment towards the British Pound but Dollar weakness.
A vulnerable Dollar seems to be keeping the GBPUSD buoyed this week with prices trading above 1.2700 as of writing. The fact that the Pound remains depressed against every single G10 currency excluding the Dollar highlights how Brexit uncertainty and political risk remains negative for Sterling. Taking a look at the technical picture, the trend still points south on the daily charts with bears in the driver’s seat below 1.2800. A breakdown below 1.2700 is likely to encourage another move back down towards 1.2620.
Currency spotlight – EURJPY
The EURJPY remains under pressure on the weekly charts as there have been consistently lower lows and lower higher. However, bulls can make an unexpected return if prices can push back above the 123.50 resistance level. If this point proves to be a stubborn resistance, then the EURJPY is likely to sink back towards 120.60 and 119.50, respectively.
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This article was originally posted on FX Empire
