S&P 500 Rallying on Positive Market Sentiments

The US500 gained 0.40% or 15.92 points in its last session on Friday 13^rd January, the Dow Jones was up by 0.33% and Nasdaq jumped up by 0.71% after the annual inflation rate in the US dropped to 6.5% in December. The positive news came just days after the World Bank signalled a possible global recession due to higher inflation rates.

The US economists are predicting that lower inflation readings may put breaks on aggressive rate hikes by the US Federal Reserve which has a target of 2% inflation. Ahead in the data-heavy week, investors will be looking towards fresh readings on producer prices, industrial production, retail sales, building permits, housing starts, existing home sales and the Philadelphia Fed Manufacturing Index.

Chart Action Points - US500 Daily Chart

Comments

1. RSI Indicator moving towards overbought zone
2. The 20, 50 and 200 SMA crossed over while rising upwards.

XAU/USD – Gold jumped up to 8 Month high of $1920 on the Dropping Dollar.

Chart Action Points - XAUUSD Daily Chart

Daily Chart Directional bias - 1 Week 

• Resistance Zone: $1900 to $1920
• Key Resistance Level: $1880
• Major Pivot Point: $1860
• Key Support Level: $1830
• Support Zone: $1808 to $1790
• 200 SMA – Green Line
• 50 SMA – Red Line
• 20 SMA – Blue Line

Chart Analysis

The gold jumped up to $1910 on Friday a fresh 8-month high as the US dollar dropped to 102 level the lowest since September when the dollar touched the 114.75 mark. This week is packed with a slew of major economic readings and central bank meetings across the globe and could be a volatile week for the XAU/USD pair and the markets in general.

The gold chart shows that the pair jumped up by $24 on Friday and now already trading above the Pivot at $1910 and about to test the Key resistance level at $1938. The 20 SMA is rising higher followed by a bullish Golden crossover of the 50 SMA up through the 200 SMA showing many possibilities of a bull market in the XAUUSD pair.

The RSI indicator is moving higher in the overbought zone and any correction from here could be quick and sharp.