Gold prices moved higher as the dollar lost ground against most major currencies. Prices tested resistance near the 10-day moving average at 1,330, and a break of this level could lead to a test of the January high at 1,366. Support is seen near the February lows at 1,308. Stronger than expected small business optimism failed to lift the dollar versus the Euro which paved the way for higher gold prices.
Negative momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in the red but the trajectory of the MACD histogram is upward sloping which reflects consolidation. The fast stochastic has moved higher out of oversold territory, after recently generated a crossover buy signal. This points to accelerating positive momentum. Additionally, the RSI (relative strength index) moved higher with price action, which reflects accelerating positive momentum. The current reading on the RSI is 51, which is in the middle of the neutral range and reflects consolidation.
U.S. NFIB small business optimism index rose 2 points to 106.9 in January
U.S. NFIB small business optimism index rose 2 points to 106.9 in January, after falling 2.6 points to 104.9 in December. The January reading is just off the 107.5 print from November, which was the highest since 1986, and is one of the highest in the history of the report going back to 1974, supported by the tax reform package. According to the report, there was a record number of respondents saying it was a good time to expand. Some 41% of respondents, up from 37% in December, expect the economy to improve.
Trump budget will slash entitlement programs
Trump budget will slash entitlement programs by $1.7 trillion according to a Bloomberg preview of the White House summary of the plan, in order to make ends meet on planned defense, infrastructure, veterans and opioid crisis spending increases. This would include a $237 billion cut to Medicare and other unspecified mandatory spending programs.
This article was originally posted on FX Empire
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