© Dukascopy Bank SA
"We are not overly concerned about the pullback we saw in the past two days, as we think gold's uptrend remains intact as long as the metal closes above $1,246."
- ScotiaMocatta (based on CNBC)
Pair's Outlook
The Greenback is appreciating on the back of weaker other currencies, while actual and expected central banks' expansionary policies are raising downside risks for gold. Yesterday XAU/USD failed to close under the weekly pivot point of 1,251, but today a selloff is being extended through this level. Any dovish movement by the ECB is likely to send the metal to the 1,230/23 area where demand will be offered by the February uptrend, 20-day SMA and weekly S1. However, December's frustration should be kept in mind, meaning less decisive Mario Draghi will increase upside risks for the bullion with an aim at recent peaks of 1,279.
Traders' Sentiment
Markets participants entered the wait-and-see mode before that crucial meeting of the ECB, as we have seen a freeze to distribution between the longs and shorts at 41-59% over the past 24 hours.
© Dukascopy Bank SA