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Friday, the World Dollar, experienced one of its worst days in more than a month after US President Donald Trump unleashed against monetary policy the Federal Reserve and will oppose the recent strength of the greenback. At the Asian trading session on Monday, the bearish dollar persists, and it loses around 0.20% (DXY).
Through his Twitter account, the head of the White House had declared that he was not happy with the Fed's adjustment cycle, since rate hikes were Interest stripped the country's exports of its great competitive advantage and damaging all the work done by its administration.
Trump's unprecedented comments have generated speculation that the president would try to intervene in foreign exchange markets to control the value of the dollar, in his protectionist offensive against the country's major trading partners.
Although these criticisms may temporarily undermine the confidence that investors have placed in the Fed in recent decades, it is important to note that the country's Central Bank is a totally independent, sheltered institution. political pressures. This means that decisions and plans of the issuer relating to the monetary policy normalization process would not be affected by the statements of Trump or any other representative of the government.
Therefore, if the US economy continues to perform as it did, the Fed's board of directors would be inclined to raise its benchmark rate twice before the end of 2018. In this situation, it is possible that in the short term, interest rates will go up again which would continue to support the dollar.
This scenario, in turn, would limit the attractiveness of the gold since the gilded metal, as a financial asset, does not pay for it. Interest or dividends . As a result, the price of gold could resume the bearish course and restore new annual minimums, but perhaps not immediately. In this context, the recorded increases in the price of gold last Friday and during the Asian session on Monday could be ephemeral.
TECHNICAL ANALYSIS OF THE GOLD
With the break in the long-term trendline (green guideline), around $ 1,240, prolonged compared to the 2015 lows, the outlook Gold futures have been deteriorated If the bullion fails to find this level in the next few days, sellers could regain control of the market. In a falls scenario, it is possible that the price will go to the support zone in the range of $ 1,210 / $ 1,205, where the 50% Fibonacci retracement of the upward movement from December 2015 to July 2016 converge with the minimum of this year. A drilling of this land would bring into play the $ 1,195, March minimum of last year.
GRAPHIC TECHNIQUE OF THE PRICE OF THE GOLD (JULY 23, 2018)
TOOLS OF TRAINING FOR OPERATORS
— Written by Diego Colman, DailyFX Market Analyst in Spanish
Follow me on Twitter: @DColmanFX
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