Gold to target previous month lowsJanuary as a month was a bag of choppy price action (maybe long term consolidaton, who knows) as it traded within the range of December high and low. Same being the case with DXY, only difference DXY showcased aggressive behaviour to trade higher, after it found support on 100.6.
Beginning Feb, DXY has taken out liquidity from January and December Highs. Factors influencing this move is based on
- Fed decision to keep the same rates - It's evident Fed is would like to observe the Q1 data before the rates can be lowered, by April it should be clear when to expect Fed to lower the rates, or still keep it unchanged.
- Positive news for DXY late January/Early Feb. Fed's decision to keep the same rates may not have strengthed Dollar, but it did not weaken it as well, and now with new highs forming, the bullishness in DXY might target HH. Suppported by bond yield which are targeting higher yields as well.
On the other side, gold is still within the range of December and January, still to break either low or highs. But with DXY's move to trade higher, Gold must feel the pressure to trade lower and target liquidity at monthly lows.
