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Gold Technical Analysis

Last week, Gold surged to a new all-time high following the FOMC decision but started to retreat soon after as the US data surprised once again to the upside. In fact, the US Jobless Claims beat expectations, while the US PMIs continue to show a reacceleration in activity with some worrying commentary around inflation. In the big picture, Gold should remain supported as we head into the easing cycle, but in the short term, the strong US data keeps on weighing on the market because it raises the risk of less rate cuts than expected.

Gold Technical Analysis – Daily Timeframe

On the daily chart, we can see that Gold rallied into a new all-time following the FOMC decision but erased all the gains soon after as the US data surprised to the upside. The price is now approaching a key support zone around the 2142 level where we can find the confluence with the red 21 moving average and the 38.2% Fibonacci retracement level. This is where we can expect the buyers to step in with a defined risk below the Fibonacci level to position for a rally into a new all-time high. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the major trendline around the 2080 level.

Gold Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the latest leg higher diverged with the MACD, which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, we are getting a pullback into the support zone around the 2142 level. A break below that zone should confirm the reversal and trigger a selloff into the major trendline.

Gold Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have some rangebound price action with the price forming some kind of a bottom around the 2160 level. The level to watch out for should be the swing high at 2186 as a break above it should change the trend and see the buyers increase the bets for a rally into a new all-time high. The sellers, on the other hand, will likely lean on the 2186 level to position for a break below the 2142 support with a better risk to reward setup.

Upcoming Events

This week is light on the data front but we will still have a couple of key events to watch out for. Tomorrow, we have the US Consumer Confidence report. On Wednesday we have Fed's Waller speaking where the market will be eager to see if the recent data changed his view around interest rates. On Thursday, we get the latest US Jobless Claims figures, while on Friday we conclude with the US PCE report and Fed Chair Powell. Strong data is likely to weigh on Gold, while weak figures should give it a boost.

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This article was written by FL Contributors at www.forexlive.com.
Source: www.forexlive.com

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