OUTLOOK: Price Signal Summary - Gold Bulls Remain In The Driver's Seat

• US Data/Speaker Calendar (prior, estimate)
• 08/20 0700 MBA Mortgage Applications (10.9%, --)
• 08/20 1100 Fed Gov Waller blockchain symposium, WY
• 08/20 1130 US Tsy $65B 17W bill auction
• 08/20 1300 US Tsy $16B 20Y Bond auction (912810UN6)
• 08/20 1400 July FOMC minutes release
• 08/20 1500 Atl Fed Bostic moderated discussion on economy, no text
• Source: Bloomberg Finance L.P. / MNI

• RES 4: 113-23   76.4% retracement of the Sep’24 - Jan’25 sell-off
• RES 3: 113-07   76.4% retracement of the Apr 7 - 11 sell-off 
• RES 2: 112-23   High May 1 
• RES 1: 112-15+ High Aug 5 and the bull trigger
• PRICE:‌‌ 111-25 @ 11:12 BST Aug 20
• SUP 1: 111-11   50-day EMA         
• SUP 2: 110-23+/08+ Low Aug 1 / Low Jul 15 & 16
• SUP 3: 110-03   76.4% retracement of the May 22 - Jul 1 bull leg
• SUP 4: 109-28   Low Jun 6 and 11 

A bullish theme in Treasury futures remains intact. The contract continues to trade above support at the 50-day EMA, at 111-.11. A clear break of this average would expose support at 110-23+, the Aug 1 low. For bulls, a resumption of gains would refocus attention on 112-15+, the Aug 5 high and bull trigger. A break of this hurdle would resume the uptrend and pave the way for a climb towards 112-23 initially, the May 1 high.

• The New Zealand dollar has been under significant pressure Wednesday, after the RBNZ committee voted to reduce the OCR by 25bps to 3.00%. There were two votes for a larger 50bp interest rate cut, representing the most fractious vote split in the MPC’s history. The dovish tilt saw NZGBs close 10-16bp richer, with OIS pricing down 14-23bp across future meetings, and 35bp of further easing priced by November.
• Kiwi weakness had been notable ahead of the decision, largely reflective of the weakness for the major equity benchmarks. NZDUSD recorded its first print below 0.5900 in two weeks, and the subsequent extension south has seen the pair trade down to a four-month low at 0.5815.
• Exponential moving average studies have moved into a bear-mode position and today’s move through the May lows bolsters the short-term bearish momentum. The 50% and 61.8% retracements of the April-July price swing are the next notable support levels, located at 0.5803 and 0.5728 respectively.
• In the crosses, AUDNZD has broken a number of daily highs just below the psychological 1.10 mark, rising to an intra-day high of 1.1069 and the highest level since early March. Further strength would place the focus back on key medium-term resistance between 1.1175/80.
• Following the upside surprise for UK inflation data, GBPNZD has surged 1.2%, briefly extending the bounce from the July lows to 4.25%. Price action for the cross has significantly narrowed the gap to the blowout highs from April this year, located around 2.3350. Downtrend resistance from the 2015 highs comes in just below this level.