US Dollar Index to ease lower on a Fed that is perceived as less hawkish – OCBC

 The US Dollar Index (DXY) is rising to the 110.00 area following Friday's retreat. This week’s FOMC meeting could send the DXY lower if the Fed is perceived less hawkish than expected, in the opinion of economists at OCBC Bank.

Caution to keep USD supported on dips in the lead-up to FOMC

“While a hawkish Fed is now the baseline scenario, we caution that a Fed that is perceived as less hawkish could see DXY ease lower post-decision. Meantime, in the lead-up to FOMC, expect caution to keep USD broadly supported on dips.”

“Support at 109.30 (21 DMA), 108.45 (38.2% Fibo retracement of Aug low to Sep high) and 107.70 levels (50-DMA, 50% Fibo).”

“Resistance at 110.30 before 110.78 (previous high).”

Market Saying Gold In Strong Demand

The US opened the economy, the world gold price dropped by over 3% in the past week
– Investors seem to be turning away from safe-haven assets like gold in the face of optimism about the COVID-19-capable drug and the way to gradually reopen the US economy.

– US President Donald Trump recently outlined a plan to loosen blockade measures in a three-phase process, but the above plan is not an order but a series of recommendations, and resolving enforcement decisions largely depend on state governors.

– In addition, optimistic psychology in the market was also boosted after information showing encouraging data from the trial of drug treatment COVID-19 by US pharmaceutical company Gilead Sciences Inc.

– Although the demand for investment in risky assets is on the rise, gold will still be supported by a series of monetary and fiscal stimulus programs that will be launched in the near future to minimize risks. The long-term damage that the COVID-19 epidemic caused to the economy.

Chart Overview-

Source- https://www.moneyliferesearch.com/daily-news-market-says-gold-in-strong-demand/