04 Feb Tuesday View

On top of worries about the Fragile Five's economy due to stimuls cut back by the Federal Reserve by another USD 10 B to net USD 65 B, yesterday's disappointing manufacturing data from the U.S. got the investors really worry and made the U.S. equity market tumble by 1%.  At closing, Dow Jones was down 2.08 % at 15372.80, S & P 500 down 2.28 % at 1741.89 and Nasdaq the biggest one to lose by 2.61 % at 3996.96.

Gold brilliantly found support at 1240, the 150 SMA in H4 chart and fought its way back to the rising channel once again. It traded to high of 1266 from 1244 level right after the ISM Manufacturing data release and as of now has correted down to 1256.

There has been three lower highs in H4 since 24 Jan but as long as the 150 SMA and a major support at 1235 holds, the view of further upside tests should be considered. A clear follow through direction should be seen after the break of 1278 on upside and 1230/35 on downside.

Trade Happy, Trade Safe :)