Gold prices surged past the key $1,600 level after Iran retaliated to the killing of General Qasem Soleimani in Iraq. It fires over twelve ballistic missiles at two Iraqi military bases housing US troops. Gold reversed after the initial spike, as no casualties were reported. Traders hope for a calm response out of the US, prompting profit-taking in this precious metal. How will price action trade into the weekend? Today’s fundamental analysis will take a look at price action in both directions.
Tensions in the Middle East are overshadowing economic reports. Japanese labor cash earnings posted a bigger contraction than expected, while Australian building approvals surprised to the upside. German factory orders soured the mood with a surprise monthly contraction, indicating the global economic slowdown is healthy. Traders are now looking forward to Eurozone confidence data as well as the US ADP report. How will Gold react after the release? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Here are the key factors to keep in mind today for Gold trades:
- New Zealand QV House Prices: New Zealand QV House Prices for December increased by 4.0% annualized. Forex traders can compare this to New Zealand QV House Prices for November, which increased by 3.3% annualized.
- Australian AiG Performance of Construction Index: The Australian AiG Performance of Construction Index for December was reported at 38.9. Forex traders can compare this to the Australian AiG Performance of Construction Index for November, which was reported at 40.0.
- Japanese Labor Cash Earnings and Japanese Real Cash Earnings: Japanese Labor Cash Earnings for November decreased by 0.2% annualized and Japanese Real Cash Earnings decreased by 0.9% annualized. Economists predicted a decrease of 0.1% and 0.7%. Forex traders can compare this to Japanese Labor Cash Earnings for October, which were reported flat at 0.0% annualized and to Japanese Real Cash Earnings, which decreased by 0.4% annualized.
- Australian Building Approvals: Australian Building Approvals for November increased by 11.8% monthly and decreased by 3.8% annualized. Economists predicted an increase of 2.0% monthly and a decrease of 11.7% annualized. Forex traders can compare this to Australian Building Approvals for October, which decreased by 7.9% monthly and 22.9% annualized.
- Australian Job Vacancies: Australian Job Vacancies for November increased by 1.6% monthly. Forex traders can compare this to Australian Job Vacancies for October, which decreased by 1.9% monthly.
- Japanese Consumer Confidence: Japanese Consumer Confidence for December was reported at 39.1. Economists predicted a figure of 39.5. Forex traders can compare this to Japanese Consumer Confidence for November, which was reported at 38.7.
- German Factory Orders: German Factory Orders for November decreased by 1.3% monthly and 6.5% annualized. Economists predicted an increase of 0.2% monthly and a decrease of 4.7% annualized. Forex traders can compare this to German Factory Orders for October, which increased by 0.2% monthly, and which decreased by 5.6% annualized.
- French Consumer Confidence: French Consumer Confidence for December was reported at 102. Economists predicted a figure of 104. Forex traders can compare this to French Consumer Confidence for November, which was reported at 105.
- French Trade Balance and French Current Account Balance: The French Trade Balance for November was reported at -€5.60B. Economists predicted a figure of -€5.00B. Forex traders can compare this to the French Trade Balance for October, which was reported at -€4.90B. The French Current Account Balance for November was reported at €0.50B. Forex traders can compare this to the French Current Account Balance for October, which was reported at -€2.10B.
- UK Halifax House Price Index: The UK Halifax House Price Index for December increased by 1.7% monthly and by 4.0% tri-monthly annualized. Economists predicted an increase of 0.6% monthly and 1.5% tri-monthly annualized. Forex traders can compare this to the UK Halifax House Price Index for November, which increased by 1.2% monthly and by 2.1% tri-monthly annualized.
- Eurozone Confidence Data: Eurozone Economic Confidence for December is predicted at 101.4. Forex traders can compare this to Eurozone Economic Confidence for November, which was reported at 101.3. Eurozone Industrial Confidence for December is predicted at -9.0. Forex traders can compare this to Eurozone Industrial Confidence for November, which was reported at -9.2. Eurozone Services Confidence for December is predicted at 9.5. Forex traders can compare this to Eurozone Services Confidence for November, which was reported at 9.3. Final Eurozone Consumer Confidence for December is predicted at -8.1. Forex traders can compare this to the previous Eurozone Consumer Confidence for December, which was reported at -8.1. The Eurozone Business Climate Indicator for December is predicted at -0.16. Forex traders can compare this to Eurozone Business Climate Indicator for November, which was reported at -0.23.
- US ADP Employment Change: The US ADP Employment Change for December is predicted at 160K. Forex traders can compare this to the US ADP Employment Change for November, which was reported at 67K.
- US Consumer Credit: US Consumer Credit for November is predicted at $15.800B. Forex traders can compare this to US Consumer Credit for October, which was reported at $18.908B.
Should price action for Gold remain inside the or breakout above the 1,565.40 to 1,600.00 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1,580.00
- Take Profit Zone: 1,684.80 – 1,696.40
- Stop Loss Level: 1,550.00
Should price action for Gold breakdown below 1,565.40 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1,550.00
- Take Profit Zone: 1,527.70 – 1,535.40
- Stop Loss Level: 1,565.40
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