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Gold: Technically Bearish, Fundamentally Bullish

Published 09/22/2017, 08:08 AM
Updated 03/09/2019, 08:30 AM

gold

After a hawkish FOMC sentiment, gold was in a selloff mode extended from Wednesday 1316 high, ended on Thursday with 1288.20 low. Today, the precious metal made some upward correction retracement, clocking 1298.75 high and currently showing some stamina hanging above 1295 support area as the tension renews after NK threatens by an H bomb in the Pacific.

Technically, closing below 20-EMA and 50-EMA level indicates a 100% downtrend with expectations to test 1285 level, in case XAU/USD closed below that level, then the second destination will be the 70s area. On the other hand, daily RSI is below 50 level, at 44, which is another proof that till further notice, bearish trend overwhelms. On the other hand, the U.S dollar today is showing weakness and the boost by FOMC seems to be short as the DXY plunged to 91.56 low, and has been bearish for the second day with daily RSI still below 50 at 43.

Right now, gold is trading 1296, and has sustained this price strongly, rejecting 1295 area as political tension is renewed, and four hours candles closed above 1296 which indicated that gold could retest 1300-4 area, but market still awaits for NY sessions to open and see how market reacts technically and fundamentally are on opposite terms. Closing on daily and H4 time frame will giver a better outlook how gold will perform next week. There is a scenario that taking into consideration that today is Friday and usually NK puts words into action on weekend, such scenario could keep gold levels poised till Monday.

Technical Overview XAU/USD

  • Current price: 1296
  • Closing price: 1291.30
  • Resistance levels: 1301.50 (5-EMA) , 1305.40 , 1310-11 ( 10-EMA crossing below 20-EMA) Daily
  • Support levels: 1295 (50-EMA) , 1290, 1284

Comment: Closing above 1296 will push gold to retest 1300-4 area as a correction phase. Closing above 1310 will stop bear forces but only a close above 1315 will rekindle the bullish trend. Closing below 1295 is another confirmation that bearish trend still persists will potential for dips towards 1285 level.

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