- Risk-on mood weighs on traditional safe-havens.
- Nasdaq Composite adds more than 2% on Thursday.
- US Dollar Index surges to its highest level in more than two months.
The XAU/USD pair, once again, failed to preserve its bullish momentum above the $1230 mark on Thursday and turned negative in the NA session as the improving market sentiment made it difficult for the precious metal to find demand. As of writing, the pair was losing $5, or 0.4%, on the day at $1229.
Strong gains witnessed in Microsoft’s shares on the back of upbeat Q3 earnings figures, the technology sector rebounded on Monday and helped the Nasdaq Composite Index add nearly 3% during the first half of the session. Additionally, the Dow Jones Industrial Average and the S&P 500 indexes were last seen up 1.5% and 1.7%, respectively.
On the other hand, with today’s ECB meeting reminding investors of the diverging monetary policies between the Fed and other major central banks, the US Dollar Index extended its march north and touched its highest level since mid-August at 96.68 to reveal a broadly stronger greenback. At the moment, the index is up 0.25% on a daily basis at 96.62. Furthermore, the upbeat data from the U.S. provided an additional boost to the dollar.
- US: Orders for durable goods in Sep. increased 0.8% to $262.1 billion.
- US: Pending home sales rise 0.5% in September following August’s 1.9% decline.
Commenting on the market reaction to today’s ECB meeting, “With the US growing almost twice as fast as the EU, the Fed two years into rate normalization which the ECB has no plans to begin, and Italy and Brexit chipping away at European unity, the euro is set up for a fourth-quarter swoon,” FXStreet Senior Analyst Joseph Trevisani said.
Technical levels to consider
The pair could encounter the first support at $1222 (Oct. 24 low) ahead of $1215 (Oct. 12 low) and $1205 (50-DMA). On the upside, resistances align at $1235 (Oct. 24 high), $1240 (Oct. 24 high) and $1248 (Jul. 12 high).
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