A combination of oversold conditions and a weakening Dollar is helping to fuel a strong recovery rally in April Gold. After failing to attract fresh selling pressure following the break under the December bottom at $1076.50, this market formed a two-day support base before moving higher. Based on the short-term range of $1166.70 to $1074.40, traders should look for a retracement to $1120.50 to $1131.40.
U.S. equity markets could not follow-through to the upside overnight after yesterday’s rally. This may be indicating the possibility of a rangebound day. Last night’s news that the Bank of Australia passed on an interest rate hike could put a little pressure on the markets today. Traders are trying to decide if risk is on or off. On the bullish side, thinning volume because of this Friday’s U.S. employment report could mean the way of least resistance is up.
The March E-mini S&P 500 closed above the 50% price at 1084.50 which should help trigger further upside movement. The charts indicate a rally to 1107.00 is likely over the near-term.