Gold dropped and then rebounded on Monday to near three-month highs, reaching 1329.31.
Geopolitical instability, particularly in the Middle East, has been underpinning the yellow metal in recent weeks. The declaration by ISIS of an Islamic state spanning both Iraq and Syria this weekend ratcheted tensions even higher.
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Gold Weekly Chart:
The advance of Iraqi forces kicked off an offensive to retake Tikrit.
The second largest oil producer in OPEC has been the barometer for crude prices in recent times, affecting the stock exchanges in the region and the global energy markets.
Yesterday, an “Inside Candle” was designed, i.e. low amplitude and contained within the previous day’s candle.
On Monday we may have a very interesting trading day and I emphasize that this inside candle is below the SMA10 (Daily Time Frame).
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Just like predicted, today the Dax has reached the lower line of the trumpet @ 9790 and declined to the minimum of 9756.
Fulfilling scenario 1 has mentioned on the previous post.
Yesterday the SP 500 index rose to the high of the previous day and returned violently down, stopping at the 10 day Moving Average.
For the particular case of the Dax index, today a break down from the yesterday’s Inside Candle occurred at the market opening time, allowing a glimpse of the scenario 1, illustrated in the figure below.
If the 10 Day Moving Average at the SP 500 Index can hold the price and function as support, we may have a pullback and scenario 2 is likely to occur.
Today Dax Index presented a breakout trading opportunity and I’ve made my Short entry:
|RR -> Reward / Risk
|Since TP1 was reached I’ve moved TP2 Stop to Break Evan
Photographer: Michele Tantussi/Bloomberg
Bundesbank board member Andreas Dombret said yesterday, “This low-interest-rate environment, as much as it’s appropriate at this point in time, over a medium and longer period of time is kind of worrisome, especially in a German environment.”
The European Central Bank’s unprecedented effort to fend off the threat of deflation has brought volatility in financial markets to a standstill. Policy makers aren’t so serene.
Price swings in euro-area bonds and equities have collapsed, borrowing costs for the riskiest issuers reached record lows and Cyprus accessed funding markets just a year after receiving a bailout. Rather than congratulate ECB President Mario Draghi, officials from Britain to the Bundesbank say persisting with the easing policy for too long may store up trouble.
“There’s a general discussion of whether investors are getting too complacent about risks,” said Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen. “At some point we are likely to reach levels that could not give proper compensation for the risk people are taking. This is similar to what happened ahead of the financial crisis.”
The unease underscores the challenge for Draghi as he and fellow policy makers attempt to revive lending in the economy without unduly inflating asset prices or enabling governments to ease up on plans to cut their deficits. A monetary policy just for Germany would set interest rates at 4.65 percent, according to a Taylor Rule model compiled by Bloomberg, versus minus 10.75 percent for Spain or minus 19.25 percent for Greece.
Read more at: bloomberg.com