Senior Trader Daily Update 18 August 2017

Good morning everyone and Happy Friday.
 
US equity markets were bludgeoned lower on Thursday as President Trump disbanded his council of economic advisors consisting of the CEO’s of many of the nation’s largest corporations, many of whom decided to hand in their resignations from the council following the President’s response to last weekend’s events in Charlottesville, Virginia. The USA is currently a nation riven by political and racial division to an extent not experienced in an exceptionally long time and this turbulence as well as another tragic event in Spain (which to all intents and purposes appears to be a terrorist incident), are likely feeding the ‘bid’ tone across the precious metals complex at present. Additionally, as noted earlier in the week, the Korean peninsula, the Middle East, Iran, Venezuela and Russia all remain US foreign policy flashpoints.
 
Technically, XAU/AUD posted an ‘engulfing’ candlestick on the Daily chart yesterday, reversing Tuesday’s and Wednesday’s slide to the downside and which opens the way for a move back into the AUD 1645 - 1650 area where the 100 Day moving average is presently located.
 
XAU/USD remains confined within the well-defined sideways range between USD 1205 & USD 1300. Whilst the major trendline resistance near the psychologically and technically important USD 1300.00 level should be afforded due respect, if I might borrow from Michael Douglas’ character in ‘Wall Street’ – “Blue Horseshoe likes gold” and an attempt to breakout above the ceiling that has held gold in check since November last year is favoured.
 
Good luck and have a great weekend.
 
Regards,
Andre