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Commenting on the latest GDP data, U.S. Treasury Secretary Steven Mnuchin said that the fourth quarter growth figures were dragged down slightly by the partial government shutdown during an interview with CNBC.

Key quotes (via Reuters)

• China trade deal will be very detailed with specific structural commitments.
• Trump administration is completely united on China trade talks.
• U.S. outlook still looks very strong.

Mnuchin’s remarks seem to be providing support to the greenback, which gained traction in the NA session on the back of rising T-bond yields and upbeat macroeconomic data releases. At the moment, the US Dollar Index is up 0.15% on the day at 96.25.

• US GDP growth in Q4 beats expectations.
• Chicago PMI rises to its best level in more than a year. 
• US Dollar Index turns positive on the day above 96.

The GBP/USD pair failed to hold above the 1.33 mark on Thursday after today macroeconomic data releases from the United States helped the greenback start retracing this week’s losses. As of writing, the pair was trading at 1.3285, losing 0.18% on a daily basis.

The U.S. Bureau of Economic Analysis today reported that according to its initial estimate, the real GDP is seen expanding by 2.6% on a yearly basis in the fourth quarter compared to the market expectation of 2.3%. The US Dollar Index, which recovered above 96 on the GDP data, extended its rebound after the Chicago PMI improved to 64.7 in February from 56.7 in January. At the moment, the DXY is up 0.15% 96.25.

Earlier in the day, British Brexit Secretary Barclay said that there was no consensus in Parliament about a second referendum. On other Brexit-related headlines, the European Union’s Chief Brexit Negotiator Barnier argued that an extension to the negotiation period was possible but questioned what purpose it would serve. “An extension must be not to delay the problem but solve the problem in the House of Commons,” Barnier explained.

Technical levels to consider

In an interview with CNBC, White House economic advisor Larry Kudlow said that he believed that the U.S. was heading to a remarkable, historic trade deal with China explaining that they made ‘fantastic progress’ in last week’s talks.

Kudlow’s optimistic comments seem to be helping stock markets gain traction. The Dow Jones Industrial Average, which started the day in the negative territory, was last seen adding 0.1% and the S&P 500 and the Nasdaq Composite were both virtually unchanged on the day.

• Real GDP in Q4 (YoY) expands by 2.6% in the U.S. 
• US Dollar Index recovers above 96.
• Wall Street looks to open the day in the red.

The XAU/USD pair came under modest bearish pressure in the last hour and erased its daily gains to turn flat near $1320 after the greenback gathered strength on the back of upbeat GDP figures. As of writing, the pair was trading at $1320.20, up only 40 cents on the day.

In its preliminary estimate today, the U.S. Bureau of Economic Analysis reported that the real GDP in the U.S. is seen expanding 2.6% in the fourth quarter compared to analysts’ estimate of 2.3%. Further details of the publication showed that the core personal consumption expenditures (PCE) in the same period increased by 1.7% on a quarterly basis to beat the market expectation of 1.6%. With the initial market reaction to the data, the US Dollar Index recovered from the 23-da low that it set 95.82 earlier in the day and was last seen flat on the day at 96.12.

Later in the day, Chicago PMI and Kansas Fed Manufacturing Index will be looked upon for fresh impetus. Meanwhile, The S&P 500 Futures is down 0.2% on the day, suggesting that Wall Street could open in the negative territory and help the precious metal limit its losses. On the other hand, the 10-year T-bond yield, which has been impacting the greenback’s market valuation since the start of the week, was last virtually unchanged on the day at 2.695%.

Technical levels to watch for

The initial support aligns at $1316 (Feb. 27 low) ahead of $1305 (50-DMA) and $1300 (psychological level). On the upside, resistances are located at $1327 (daily high), $1332 (Feb. 25 high) and $1341 (Feb. 21 high).

Comments from the Federal Reserve’s Vice Chair Richard Clarida continue to cross the wires as he continues to speak at the National Association for Business Economics Policy Conference in Washington.

Key quotes (via Reuters)

• Fed has not made a decision on the balance sheet composition yet.
• Fed will decide ultimate size of balance sheet in coming meetings.
• Fed wants to be “very very clear” that upcoming framework review will not alter 2% inflation target.

Research team of Development Bank of Singapore Limited, suggests that the market is buying gold and seeing a pseudo bullish reverse head-and- shoulders pattern, but resistance at 1356 and the pattern’s neckline at 1362 would pose as substantial barriers.

Key Quotes

“We hold the view that gold prices are languishing in a broad triangle since gold traded down to a cyclical low at 1046.”

“Gold is currently staring right at a channel support, but needs to run lower to complete a corrective abc dip. A channel-support break would likely push gold lower toward 1303. There, market would seek a timeout & feature a bout of consolidation.”

“But that is likely an effort to buy time before gold eventually sees any bounce higher and has more passengers alight from gold bus. As for broader picture, market needs to see further waning interest and momentum loss to feature decline for 38.2% Fibo retracement of Aug18’s 1160-lows vs the recent 1347-high, around 1275. That is likely to be a respectable support zone. Certainly, that would be a better zone to rebuild longs.”

   •  The cross came under some renewed selling pressure on Thursday and dropped to test ascending trend-line support, extending from Jan. 8th.

   •  A sustained weakness below 200-hour SMA was seen as a key trigger for bearish traders and behind the pair’s sharp intraday slide of over 50-pips.

   •  Technical indicators on the 1-hourly chart are already pointing to oversold conditions and warrant some near-term consolidation before any further downfall.

   •  Meanwhile, oscillators on 4-hourly/daily charts have just started gaining negative momentum and support prospects for an eventual bearish breakdown.

   •  A sustained weakness below the mentioned trend-line support will reaffirm the bearish outlook and accelerate the fall further towards the 1.1300 handle.

EUR/CHF 1-hourly chart