Gold Technical Analysis | Forexlive

On the
daily chart below, we can see that gold has recently bounced on the strong support
zone at the 1934 level where we can find confluence
with the 50% Fibonacci
retracement level, the trendline
and a weekly 21 moving
average.

The fall
in Treasury yields has also helped gold as the market may now need more strong
economic data to price in something more hawkish. Yesterday, the big beat in US
Job Openings weighed on gold as the market odds for a June hike jumped to
70%. Even though some Fed members hinted to a June pause, gold has weakened
further.

We can
see that the bias for now remains bearish as the moving averages are crossed to
the downside. In case the price rallies again into the red 21 moving average,
we can expect sellers waiting there to target the breakout of the trendline
which would open the door for a big fall into the 1800 swing level.

Gold Technical Analysis

On the 4
hour chart below, we can see that the bounce on the 1934 support zone has led the
price to break above the downward trendline. This signals that the bearish
momentum has weakened and in fact the price was diverging
with the MACD
falling into the 1934 support. We should now expect gold to reach the 1984 resistance,
which is also the lower high of the 4-hour downtrend.

A break
above that level would switch the trend to bullish and probably lead to a rally
back towards the 2076 high. At the moment, gold has pulled back into the resistance
turned support at 1954 and we can see that we also have the red 21 moving
average sitting there. We may see a bounce here and a rally into the next
resistance.

On the 1
hour chart below, we can see more closely the short-term price action with gold
selling off into the 1954 support. As mentioned above, we should find buyers
leaning on this level with a defined risk just below it and the 1984 resistance
as the first target. The sellers, on the other hand, will want to see the price
breaking lower to target again the breakout of the 1934 support.

We have important economic
indicators today: the
US Jobless Claims and the ISM Manufacturing PMI. However, considering the
comments made by Fed members yesterday, positive data might not result in
significant weakness for gold, as the focus will be on tomorrow’s NFP report
and next week’s CPI data, which will have a greater impact on decision-making. On
the other hand, bad data should have positive implications as the Treasury yields
should fall giving gold more breathing room on the upside.

The upcoming US NFP report
will capture everyone’s attention tomorrow. If the data reveals positive
results along with an exceeding average hourly earnings figure, it is likely to
have a detrimental effect on gold. This outcome could prompt market concerns
about a potential wage price spiral. On the other hand, if the data is good but
falls short of expectations in terms of average hourly earnings, it may not
cause too much damage. In the case of bad data though, gold may rally hard and
the 2076 high would be easy to reach.