- The dollar retreated below its resistance at H4-period EMA60 after rebounding thanks to better-than-expected Q3 U.S. GDP QoQ which was revised up by 0.3% to 3.3%, versus the expectation of 3.2%.
- The gold surprised the markets by declining sharply on Wednesday. Slipping more than 140pips on the day, it will be interesting to watch whether or not the yellow metal could stage a short-term corrective rebound.
- The Senate will vote on the tax reform bill today. In addition, we will get EU inflation figure for November and U.S. PCE YoY for October.
The dollar closed at a doji pattern against a basket of six majors in the choppy Wednesday 29 November below H4-period trend resistance. U.S. released its released figure for Q3 GDP QoQ last night which was revised up by 0.3% to 3.3%, higher than the expectation of 3.2%. It reacted off resistance, however, when Fed Chair Janet Yellen testify before the Congress on U.S. economic outlook. It traded sideways as concerns over uncertainty in the tax reform lingered in late session. The Senate will vote on the tax reform bill today. In addition, we will get EU inflation figure for November and U.S. PCE YoY for October.
The dollar index (DXY) whipsawed around its long term moving averages on the 4 hour chart. Its short term moving averages moved towards though still respected its upside resistance at long term moving averages which remained bearish and divergent while flattened further. Whether or not the index could stage a bullish breakout, helping by the potentially approved tax reform bill, will be important to observe.
（DXY H4 chart）
As to non-U.S. currencies, the euro consolidated above its H4-period EMA60. Watch the shared currency up momentum going forward on the 4 hour chart. The British pound created another new high since the recent upleg in early morning session after climbing in a choppy manner. Whether or not the sterling could extend its rally will be important to watch. Closed lower on Wednesday, the Aussie dollar bounced back after forming a lower low on the 1 hour chart, potentially stage consolidation in the short term.
（GBPUSD Daily chart）
Switching gears to precious metals, the gold nosedived below its H4-period trend support to circa H4-period EMA169 in Asian session. Its short term moving averages started to cross below its long term moving averages which contracted sharply with signs of turning lower. With the laggard moving averages, it will be interesting to watch whether or not the price action of the yellow metal could form and even extend a downtrend.
（Gold H4 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.