Two trades to watch: Gold, DAX

Gold looks to US inflation data. DAX rises, German wholesale prices fall.

Gold 2

Gold looks to inflation data

Gold is easing lower after three straight days of gains.

The precious metal rallied over 1% in the previous session after Fed Powell managed to calm the markets regarding the Fed’s next move. But also managed to re-assure that the Fed would move faster to tighten policy if needed.

All eyes are on US CPI data which is expected to show inflation rising to 7% in December a 40 year high.

A stronger than forecast print could boost expectations of a faster pace of tightening by the Fed, which would be bad news for non-yielding gold.

Learn more about inflation

Where next for gold?

Gold extended the rebound from its rising trendline dating back to late September, but has run into resistance at 1823 and is easing lower.

Gold holds above its 50 & 100 sma which combined with the bullish RSI suggests that the dip lower could be a buying opportunity.

It would take a move below 1805 100 sma to negate the near term uptrend and a move below 1782 for sellers to gain traction.

Gold chart

DAX rises, German wholesale prices fall

European indices, including the DAX are on the rise after an upbeat finish on Wall Street.

Despite a hawkish tone from Fed Powell, his appearance before Congress prompted optimism and confidence in the US economic recovery.

Today German wholesale price unexpectedly fell to 16.1% YoY, down from 16.6% and below forecasts of 17.6%.

Learn more about the DAX

Where next for DAX?

The DAX has been extending its rebound from this week’s low at 15725. The rise above the 50 & 100 sma in addition to the bullish RSI are keeping buyers hopeful of further upside.

Buyers will be looking for a move over 16200 high January 4, in order to target 16275 and fresh all time highs.

On the flip side, immediate support can be seen around 16000 round number and 50 sma. However it would take a move below 15726 for the bias to change to bearish.

DAX chart


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