GOLD, DAX 30, HANG SENG INDEX OUTLOOK:
- Gold price jumped 2% to US$ 1,989 before erasing some gains to US$ 1,980 on a weaker USD
- DAX 30 climbed marginally to 12,930, facing a key resistance at 13,000
- Hang Seng index is set to move higher after yesterday’s 1% rally; Shanghai stocks jumped
Gold Price Outlook:
A weakening US Dollar is sending gold prices higher, after an extremely volatile week. Gold prices surged fiercely on Monday to US$ 1,989 before cooling off slightly to US$1,980 this morning. Its overall trend remains bullish in the day chart, with the 20-, 50- and 100-Day Simple Moving Average (SMA) lines trending up nicely.
Gold prices have been ranging between US$ 1,910-1,970 these days after two extremely volatile sessions seen last Wednesday and Thursday. This week, investors are eyeing Wednesday’s Federal Reserve meeting minutes, the review of the phase-one US-China trade deal for clues about inflation outlook, central bank policy guidance and geopolitical prospects.
The mid- to long-term outlook of gold prices remains bullish against the backdrop of ultra-loose monetary policy, geopolitical and pandemic risks, and a low interest rate environment.
The US Dollar Index resumed its downward trajectory to 92.85 on Tuesday morning, facing immediate support level at 92.55.
Gold Price – Daily Chart
DAX 30 Outlook:
Germany’s DAX 30 index stock market benchmark climbed 0.15% alongside a broad rally in European stocks on improved risk sentiment. The index is trending up nicely from the trough observed in late March this year, gaining 62% since then.
Sector-wise, information technology (+0.98%), utilities (+0.68%) and healthcare (+0.54%) were among the best performers, whereas communication services (-1.21%), financials (-0.37%) and materials (-0.26%) were lagging.
DAX 30 Sector performance 17-8-2020
Source: Bloomberg, DailyFX
Technically, the DAX came to a key resistance at 13,000 – the previous high seen in end July and mid-August. Its overall trend remains bullish, as suggested by upward-sloped 20-Day, 50-Day and 100-Day Simple Moving Averages (SMA) lines. Breaking above 13,000 would likely open the room for more upside towards 13,800 – the all-time highs.
Dax Index – Daily Chart
Hang Seng Index Outlook:
Hong Kong’s Hang Seng index stock benchmark rallied over 1% on Monday, boosted by ‘risk-on’ sentiment in the mainland China A share markets. Shanghai composite surged 2.43% with higher trading volume, suggesting that bullish sentiment is prevailing.
Sector-wise, information technology (+1.55%), energy (+1.38%), financials (+1.1%) were among the leading sectors, whereas consumer discretionary (-0.53%) and communication services (-0.32%) were lagging.
Technically, Hang Seng index has broken above the ‘descending channel’ last week and attempted a bullish reversal. Its immediate support and resistance levels can be found at 25,200 (38.2% Fibonacci retracement) and 25,860 (23.6%) respectively.
Hang Seng Index – Daily Chart
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— Written by Margaret Yang, Strategist for DailyFX.com
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