UM Consumer Sentiment: Today, a preliminary reading of University of Michigan’s Consumer Sentiment data for February came in at 93.6, missing forecast around 98.2, and was lower than January’s 98.1 reading. It should be noted that this is the 1st time the reading missed forecasts after 5 consecutive months of prints above forecast. It was also the first dip after 5 consecutive months of improving sentiment readings:
(click to enlarge; source: forexfactory.com)
While the reading missed forecast, it is not that bad given the fact that sentiments have been rising in the past 6 months. The market is selling the USD across the board, but in a very tentative manner. There does not seem to be any “juice” behind the reactions.
Gold has been sliding since making a high on the year near 1307.60. It has fallen to a low of 1216.60 this week, and then started to consolidate. As we wind down the week, traders seem to be building a price bottom.
Price Bottom: Gold was already trying to put in a price bottom, and today’s US data should help nudge it along. The 1H chart shows price breaking above a falling speedline, the 50-hour and 100-hour SMAs. The RSI is pushing above 60, showing loss of the prevailing bearish momentum. In th 1H chart, it looks like the next key resistance will be around 1245, which is also where the 200-hour SMA resides at the moment.
Resistance: When we look at the daily chart, we can see the month-long decline since January more clearly. Around 1245, we can see the 50-period and 200-period SMAs in teh 4H chart reinforcing this area as resistance. Besides the 1245 resistance area, there is a another key resistance around 1260, where price would be testing a falling trendline from January, and a previous support area.
If price can break above 1260, the 4H RSI pushes above 60, then, the bullish outlook might be back in play, with at least the 1300 handle, and the 1307 high in sight. For now, the price bottom made in the 1H chart only suggests a bullish outlook in the short-term, and the noted resistance levels should be respected.
Previous Post by Author: AUD/NZD Signals Further Downside with the Historic Low in Sight