Gold prices moved higher on Wednesday, as issues related to Brexit helped buoy the yellow metal. House of Commons rejected Prime Minister May’s Brexit plan by a vote of 391-242. they then voted down a no-deal Brexit. The news is not good for the PM and her government may not survive.
Gold prices moved higher on Thursday pushing through resistance which is now support seen near the 50-day moving average at 1,303. Additional support is seen near the 10-day moving average at 1,295. Resistance is seen near a downward sloping trend line that connects the highs in April of 2018 to the highs in February of 2019 and comes in near 1,345.
Medium term momentum is poised to turn positive as the MACD (moving average convergence divergence) index is poised to generate a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the red with a rising trajectory which points to accelerating positive momentum and higher prices.
The fast stochastic recently generated a crossover buy signal, which also points to accelerating positive momentum. The trajectory of the fast stochastic is pointing to accelerating positive momentum. The current reading of 37, is above the oversold trigger level and moving to the middle of the neutral range.
No-Deal Brexit Voted Down
On Wednesday the UK parliament voted to block a no deal Brexit. The hard Brexit failed. The Article 50 deadline will be delayed to March 29. This is not good for the PM. There is now the possibility of a no-confidence vote or a second referendum.
European data was also mixed on Wednesday as EU January Industrial surged after tumbling at the end of 2018. While France and Italy reported better than expected IP, German saw output tumble. European Industrial Production rose by 1.4% beating forecast.
This article was originally posted on FX Empire
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