Gold gains and Euro eyes reversal

Gold saw significant gains after the open even as the Dollar barely moved, showing a break from correlation and the inflation trade. As inflation starts to weigh off and the Fed begins to implement less hawkish policies in the US economy, we are seeing Gold become a safe haven asset amidst China’s covid uncertainty.

The Dollar has been the safe haven for the past year but as the Fed pauses on rate hikes, we have seen the Dollar fall and investors are turning back to the precious metal.

US Treasury Bond yields have been positive which is capping the bullish gains in the non-yielding metal and providing an assist for the Dollar to find support. We are seeing the Dollar hit a bottom now and begin to reverse to the upside as indicators are gaining strength.

Jobs data will be released this week as an indication of inflation in the US economy. Investors should keep an eye on Nonfarm Payrolls as this is one of the most effective signals in terms of growth in the economy.

EUR/USD is dependent on the Dollar and with the Dollar Index gaining strength, we are expecting to see bearish moves in the pair.

Bitcoin is consolidating and we are yet to see a break away from the sideways trading we have experienced in recent weeks.

In today’s DIFX Analytics, we’re going to look into the following assets:

Bitcoin is stuck below $17k

Bitcoin is consolidating and hasn’t breached the $16,400 – $17,000 range for quite some time.

RSI is bullish on the 4-hour chart but price action is hardly responding with small and patient gains to the upside.

The asset is trading at the 50-day and 100-day EMA on the 4-hour period but we can expect this asset to break to the upside and touch resistance at $17,000. 

DXY is gaining strength

RSI on the daily chart for the DXY has begun to set higher lows showing bullish divergence for the index. The reversal seems to be upon us as the market reopens for 2023.

The Dollar saw slight gains since opening but price action is still in a neutral position. Jobs data will bring volatility toward the end of the week and we can expect the trend to pick a direction.

EUR/USD is weak 

We are seeing RSI on the Daily chart become more and more bearish. Technicals have signaled a reversal in the pair as it began setting lower lows and lower highs.

Price action rejected the resistance at $1.07 and The first support is around $1.058. Analysts see the asset breaking the trend to the downside as it becomes increasingly bearish.

Gold breaks above RSI trend

The RSI on the Daily chart for Gold was trending in a range to the downside which was bearish but it has broken above this bearish trend indicating a reversal.

We see upwards momentum in the asset price action touching $1842. Price action is trading near the top of the range with the next resistance sitting around the $1854 level.

Volume has returned to the market and Gold is bullish.



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DIFX shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee, or implication by DIFX that the forecast information will eventuate, that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses in particular if the conditions or assumptions used for the forecast or mentioned in the analysis do not eventuate as anticipated and the forecast is not realized.

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