Bargain hunters helped drive April gold prices higher on Tuesday. The weaker U.S. Dollar also helped underpin the market. Technically, several days of narrow trading and consolidation gave one the feeling that something was up, but the direction wasn’t clear. On one hand we had the downtrend on the daily chart, but we also had a new higher bottom at $1560.40 from March 8 which was indicative of new buying.
Technically, April gold is trading on the bullish side of a retracement zone at $1587.00 to $1579.28. Uptrending support is at $1580.30. Downtrending resistance is at $1599.70. This has created a triangle chart pattern on the daily chart which is indicative of more short-term volatility.
Short-covering and a weaker U.S. Dollar continued to drive April crude oil prices higher amid bearish supply and demand fundamentals. Technically, crude oil has been moving up at a rate of .50 since reaching a bottom at $89.33 on March 4. The angle it has been straddling during the rise is at $92.33 today. Based on the short-term range of $98.65 to $89.33, the major upside target is $93.99 to $95.09. A downtrending Gann angle at $94.15 could provide additional resistance.
The GBP/USD suffered additional losses today. This morning the U.K. reported that Industrial production fell 1.2% in January versus the previous month, missing forecasts. This report is further confirmation that the U.K. economy is headed toward a recession. Traders are selling the Sterling in anticipation of additional stimulus from the Bank of England. This action tends to weaken a currency.
Oversold conditions and a slightly weaker U.S. Dollar are helping to boost demand for the Euro. After spiking down to 1.2955 on Friday, the EUR/USD appears to be forming a support base. The first upside objectives are a series of down-sloping Gann angles at 1.3139, 1.3153 and 1.3171.
The main trend is down, but a rally through these angles will be as strong signal that sentiment is shifting to the upside. Additionally, a trade through the swing top at 1.3161 will turn the main trend to up. - fxempire
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