Gold Prices are Finding Support Due to the Weakening of the US Dollar

European Shares

The recent hawkish wording from the Fed is pressuring market sentiment in the very short term, and an increased market volatility is likely in the afternoon with another speech from Jerome Powell due. Hopes of a quick end or pivot in the current hawkish monetary policies that many started pricing-in from November are fading after Fed officials reaffirmed the possibility of refinancing rates sitting over the 5% mark over the long term, and this has led to a reduced appetite for stocks and a move to some profit-taking after a solid start to 2023.

That said, while investors will pay a close attention to today’s EIA Energy Outlook and US wholesale inventories, all eyes will be on Thursday’s new US inflation print as investors expect the report to provide them with more clues on the Fed’s next move. Meanwhile, the short-term bullish trend will stay alive as long as no major support zone are broken. The DAX-40 index registered one of the biggest moves, with the market trading around 14,750.0pts, stuck between the 14,670.0pts support level and the 14,7780.0pts immediate resistance (38.2% Fibonacci extension) inside a bullish channel.

Pierre Veyret– Technical analyst, ActivTrades 

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