What’s up, traders.

The US Dollar Index lost 0.6% on the day to 97.51, posting a three-day decline. On Tuesday, the eyes will remain on the UK monetary policy hearings, and G7 meeting as nations may discuss Coronavirus and reveal their plans to deal with it.

U.K. – Monetary Policy Report Hearings – 9:30 GMT

The British Parliament is due to release the Monetary Policy report hearing at 9:30 GMT. During these hearings, the BOE Governor and many other MPC members testify on inflation and the economic forecast before Parliament’s Treasury Committee.

The hearings are several hours in length and can generate market volatility for the span. Particularly noted are the direct remarks made about the currency markets.

Traders will closely monitor this hearing to have forward guidance on the next BOE rate decision, especially in the wake of the coronavirus outbreak situation.

GOLD – XAU/USD – Daily Outlook 

The precious metal gold surged over 1.5%, improving from its most significant one-day drop in almost seven years, on the odds for fund rate cut by the US Federal Reserve to diminish the economic impact from the coronavirus break. Last week, the yellow metal slipped dramatically by more than 4.5% for its most significant daily decline since June 2013 as traders liquidated positions to meet margin calls in other securities.

Monday has been a painful start to the week for some investors with further drop-offs in a variety of markets occurring at the market open. It marks the sixth day of declines in a row, which we have not seen in some time, so traders should prepare themselves for the possibility that this week will likely be filled with negative data, driven by coronavirus fears.

Last week, coronavirus fears resurfaced, and this helped to trigger a good number of trend line breakout trades, which I hear that some of you have been able to catch. The virus came back into focus late last week, and this tipped the major US stock indices into negative territory; note how much of Saturday’s CNBC front-page was dedicated to virus-related issues.

XAU/USD – Daily Technical Levels

Support Resistance

1,552.02 1,631.45

1,517.83 1,676.69

1,438.4 1,756.12

Pivot Point 1,597.26

On the technical front, gold has closed a bearish engulfing candle around 1,593. Typically such patterns trigger further selling in XAU/USD, and we may see gold prices going after the next immediate support level of 1,580. Violation of this level can extend further selling until 1,572. Alternatively, the resistance stays around 1,602. Let’s consider a selling trade under 1,597 today. Good luck!