- The dollar hit another fresh yearly low against a basket of six major rivals and reached 91 in Asian session while the euro posted solid gains to break above 1.2 handle as the President of ECB delayed its tapering decision until its next meeting in October.
- The gold bulls took advantage of the weakness in the dollar to clear the hurdle at 1350 early this morning, targeting next resistance at 1380 on its monthly chart.
The euro soared although ECB President Draghi delivered cautious tone at a post-policy meeting conference press on Thursday (7 September). Meanwhile, the greenback broke below last week’s lows before it slipped further in early Asian session with modestly strong short-term downside momentum. Draghi acknowledged the recovery in Euro Zone and expressed confidence in inflation prospect. However, the decision to delay tapering QE until its next meeting in October triggered a wave of speculation. The gold rose along with non-U.S. dollar currencies and broke above 1350 early this morning.
The dollar index (DXY) broke below last week’s lows and its short term moving averaged accelerated descending. Its long term moving averages consequently were made to diverge faster with bearish bias. The index is expected to decline further towards downside support at 90.86.
（DXY H4 chart）
As to non-U.S. currencies, the euro staged bullish breakout above 1.20 handle, potentially targeting a 29 August high at 1.2069 if the single currency could sustain the up move. The sterling extended its daily winning streak to four, and it will be interesting to watch whether or not the pound could break above 1.3150 on the day. The Aussie dollar rose even faster and staged bullish breakouts to hit a fresh high for 2017 in Asian session today, with upside resistance at its monthly EMA60.
（AUD/USD Monthly chart）
Let’s take a look at precious metals. The gold posted almost 200pips gains from the opening level on Thursday to highs hit on Friday morning with an obvious uptrend on the 4 hour chart. Having been well above its pointing-higher long term moving averages, its short term moving averages turned higher again and ascended rapidly with bullish bias after a brief convergence, indicating still-strong upside momentum, with upside target at 1375 follow by 1380. Whether or not the yellow metal could continue its uptrend will be important to observe.
（Gold Monthly chart）
By JasonZou —— Chief Analyst of AvaTrade China
Disclaimer: The views and opinions expressed in this article are those of the authors and for the purpose of reference only, and shall not be relied upon by investors in making any trading decisions.