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Gold/EUR strengthens ahead of ECB meeting

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 7, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Gold prices in the EUR terms or XAU/EUR pair advanced on Monday as investors weigh in a possibility of an aggressive ECB action on Thursday.

    Eyes Jan 2015 high

    Prices are eyeing January 2015 high of EUR 1164.60 after S&P economists said the ECB could announce a 20 basis point rate cut, which means the deposit rate would stand at -0.50%.

    Markets have priced-in a 10 basis point cut and anything more than that could surprise markets. Hence, the EUR/USD pair dropped to a low of 1.0940 before recovering slightly to 1.0950 levels.

    The yellow metal, thus, clocked a high of EUR 1163.21 before trimming gains to trade around EUR 1156/Oz levels.

    Gold/EUR Technical Levels

    The immediate resistance is seen at 1167.81 (Jan 26 high), above prices could eye major hurdle at 1202.72 (May 2012 low). On the other hand, a breakdown of 1143.65 (daily low) would expose support at 1135.67 (Feb 24 high).
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