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.