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FxWirePro: Gold Vs US bond yield
Ichimoku Analysis (Weekly Chart)
Gold continuously trading on the higher side for the past four months and jumped more than $500 on safe-haven demand. The dovish Fed has dragged the US dollar index further down and hovering near 2- year low. The pandemic has started in Feb, the number of cases in the world crossed 17.5 million and deaths nearing 6.70 million.
Gold Vs. US yield.
US Bond yield:
The U.S 10 year bond yield lost more than 40% from the minor top 0.95% made on un 2020. It has inched lower to around 0.573% at the time of writing. The dovish Fed might drag the yield further down till 0.36% low made on Mar 9th, 2020. Technically in the Weekly chart, it is facing bullish divergence and minor recovery in yield will be possible. The US 2-year yield trading at a near-record low and spread between US 10- and 3 months narrowed to 0.47%% from 1.81%.
US Dollar Index - bearish and hits 2- year low (positive for yellow metal)
S&P500- bullish (positive for gold)
US Bond yield- weak but oversold (slightly negative for gold)
The yellow metal is in the overbought zone and minor profit booking till $1900 is possible. The near term resistance is around $2000, the violation above will take the pair to the next level till $2025/$2040.
The immediate support is around $1930, any indicative break beneath targets $1900/$1859.
It is good to sell on rallies around $1960-63 with SL around $1981 for the TP at $1900.