Morning Wrap 24 August 2017

Good morning everyone.

Gold and JPY moved slightly higher as the Donald moved swiftly to correct my erroneous and unfounded report via Mitch McConnell that the debt-ceiling was safe in the hands of Congress. Apparently not – however moves were relatively well contained given that the President was addressing a rally in Phoenix, with markets discounting the impact of the message. The dollar index dropped to 93.13 and US 10 year debt yields moved down to 2.17 per cent.

Mario Draghi side-stepped any predictions over the ECB’s policies ahead of the Jackson Hole symposium, merely reiterating that central banks must remain open-minded on policy innovations. He is expected to deliver a dove-ish speech this Friday to try and restrain the strengthening EUR.

XAUAUD is near the top of the recent range, with resistance at A$1640 and support at A$1626 and A$1613. Gold in AUD has struggled to get past the 50 per cent retracement of the move from the June high to the recent low of July, which equates to A$1640, also the top of the Daily Ichimoku cloud.

XAUUSD rallied from the US$1281 support level and is now being thwarted by the top of the hourly Ichimoku cloud and the recent highs. US$1300 and US$1309 remain important and overall the market looks capable of a bullish outcome, perhaps weighed down to some degree by recent speculative longs. CME December open interest has trimmed slightly since last Friday suggesting that a few of those are quietly exiting.

Good luck today!