Global macro overview for 25/05/2016:
The US house market data has surprised market participants posting better than expected figures. Investors expected lower number of sold houses than a month ago ( 521k vs. 531k prior), but the nice number of 619k leaves no room for doubt, that the house market might be picking up this year. Moreover, last month house sales marked an 8-year high as well. In conclusion, growth in the housing market spurs more consumption, generating demand for goods, services and the employees who provide them. Following the excellent figures release, US GDP is due. The US economic growth might expand in Q1 and the previous GDP report might be revised higher as well.
This strong data is very good for the US dollar and slightly worse for commodities, in particular gold. So let's take a look how the XAU/USD pair responded to the news release in the daily time frame. As we can see, the golden trend line has been violated and now the yellow metal bears should push the price lower towards the level of $1,208 first and then $1,191. We will wait and see how the price will react to one of these levels before drawing any conclusions.
