- The dollar rallied further against a basket of six majors at the night when Jerome Powell sworn in as Fed’s 16th leader.
- The gold rebounded thanks to the stock disaster fallout as other stocks around the world followed Wall Street lead lower.
The dollar rallied further to break above its H4-period trend resistance against a basket of six majors on Monday 5 February at the night when Jerome Powell sworn in as Fed’s 16th leader. The gold rebounded despite the rising dollar thanks to the fallout of the stocks collapse as other stocks around the world followed Wall Street lead lower.
The dollar index (DXY) staged a bullish breakout above its resistance at EMA60. Its short term moving averages continued to go higher with highly likely to cross above its long term moving averages which contracted in the significant way. Be aware of the potential trend reversion on the 4 hour chart.
（DXY H4 chart）
As to non-USD currencies, the euro dropped below its support at EMA60. A further decline below last week’s low could open up the scope for more downside moves with daily support at circa 1.2263. The British pound showed a typical N-shape pattern on the 4 hour chart, threatening to test its daily EMA30 today. Watch out the potential implications of the Brexit negotiation in U.K. The Aussie dollar cleared its daily support with strong downside momentum in the short term and therefore corrective rally expectations for the commodity currency are building up.
（AUDUSD daily chart）
Let’s take a look at precious metals now. The gold rose along with the dollar on risk aversion sentiment. All three U.S. major indexes created a new intra-day low early this morning while the precious metal fell back to offer a significant opportunity to go long at lower levels. Look for recouping all of its last week losses today.
（Gold M30 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.