Forex Flash: Potential EUR correction support XAU/EUR long idea - Saxo Bank

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FXstreet.com (Barcelona) - Ole Hansen, Head of Commodity Strategy at Saxo Bank, sees potential to enter a long position in XAUEUR at current levels, with initial stop at 1,237 (December low), aiming for 1285, January high. The analyst adds that the trade can be played as a combination of "buying XAUUSD and selling EURUSD for an equivalent amount."

According to Mr. Hansen: "Gold continues to consolidate while the euro looking overbought. The price of XAUUSD has spent the last few days consolidating following the sell-off last week. We have so far managed a couple of closes above the 200-day SMA, currently at 1662, which has become a point around which most of the action has been seen during the last month. In order for gold to turn properly bullish we need to see a technical break above 1710 USD/oz and while we wait for that to happen eventually, some better opportunities may be provided by the XAUEUR."

Ole notes the following risk: "EUR continues to rally while a correction against the dollar carries the risk of dragging XAUUSD lower which is why the stop is located just below the recent lows as trend-line support from October 2011 would be broken."



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Forex and Currencies

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