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Gold trades lower after ECB dovish taper, good to sell on rallie

FOREXCOM:XAUUSD   Gold Spot / U.S. Dollar
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Gold declined sharply after ECB monetary policy meeting. The yellow metal declined till $1265 3- week low and is currently trading around $1267.43.

• ECB has kept its interest rates unchanged at 0.0% as widely expected and the marginal lending facility and deposit rate unchanged at 0.25% and -0.40% respectively.

• ECB tapers Asset purchase program (AAP) to 30 billion euros slightly dovish than expected. The central bank puts a gentle dovish twist on assets purchase. It has reduced to half asset purchase and extended its duration.

US Dollar index has shown a massive jump after breaking high of 94.27 yesterday. The index jumped till 94.87 and is currently trading around 94.81. The index is facing strong resistance at 95.25 (61.8% fibo) and any break above targets 96.51 level. It is currently trading around 94.81. The pair is facing major support near 93.75 (7- day MA) and any break below confirms minor weakness till 93.46 (55- day EMA )/92.60 likely.

• Technically gold is facing near term resistance around $1274 (23.6% retracement of $1305 and $1265) and any break above will take the pair to next level till $1284/$1291. Overall bullish continuation can be seen if it closes above $1300 (50- day MA).

• Gold’s near term support is around $1262 ( 61.8% retracement of $1204 and $1357.90) and break below will drag the commodity down till $1250.The yellow metal should close below $1250 for major trend reversal.

It is good to sell on rallies around $1283-85 with SL around $1290 for the TP of $1262.








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