Last week Gold prices recovered almost 4.75% and managed to get back above 1848 level, after US non farm data disappointed. Since the development in Covid-19 vaccines globally, Gold has been continuously sliding for over a month now. As we have suggested previously, Gold is in a structured bull run, it might not correct heavily on the downside. Also, the weak Dollar Index($90.50) is supporting the Gold to increase.
Technically for the coming few weeks, Gold might show volatile movement. It managed to close the previous week at Fibonacci retracement level of 61.8%, $1837. Any sustainable move above 61.8% Fibonacci retracement level; prices might attempt to hit the next 78.6% retracement level, which is at $1943. On the downside, failure to hold the $1837 level might lead the prices back to $1761, which is also 50% Fibonacci level and weekly MA(50).
The Dollar Index has been correcting since March-2020. It has dropped more than 12% from the high of $103 to $90 level annually. Continuous economic stimulus from the US FED, Weak US economy is hindering the Dollar Index.
Technically, last week it broke down 50% Fibonacci Retracement level of $91.38 and on a weekly chart RSI suggests it is still not over sold. Even if it has to continue its downward trend, it might show some extreme volatility. On a more positive note, it might bounce back to $94 level before it breaks 38.2% retracement level of $88.40.
Last week EUR/USD hit an 18 month high by crossing 1.21 level. For the past year or so, the bank has already started expanding its stimulus program, and is expected to announce its rate decision on Thursday 10th December.
Price action suggests EUR/USD is all set to cross its 2 year high. Previous resistance of 1.20 might act as strong support for the coming week. On the other hand, in the weekly chart RSI is showing some divergence; prices are going up at the same time the RSI did not cross its previous high, therefore any sustainable move might give some more confirmation for the prices to go up.
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