With the euro rebounding and the US dollar losing ground, gold prices surged higher on Friday. Gold passed through its 20-day moving average at $1,286 which now is its short term support.
Resistance would be close to its June 2018 highs at around 1,310. With the fast stochastic generating a crossover buy signal, short term momentum will turn positive with reflects accelerating it.
Negative momentum would be decelerating now, especially with the MACD histogram showing an upward sloping trajectory, looking like it is poised to generate a crossover buy signal.
As risks are now to the downside, the ECB will wait some time until their staff projections are released and later then they should make a decision.
German government cut its 2019 growth forecast, setting it at 1.0%. This forecast seems to be more pessimistic than the recent IMF revision for Germany, cutting its 2019 growth forecast to 1.3% from its previous 1.9%.
The German PMI came out before the ECB decision, dropping below the 50 handles reflecting contraction. Now the IFO reported January German Business confidence at 99.1 vs. the expected 100.7, being the lowest in years.
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