Gold Technical Analysis | Forexlive

After the big jump following the surprisingly
dovish FOMC decision, Gold started to consolidate as the lack of major
catalysts and the upcoming Christmas holidays led to a rangebound price action.
In the big picture, Gold remains supported due to rate cuts expectations and
falling real yields, but on a more short-term basis, the recent strong economic
data could weigh on the yellow metal as the market might trim the rate cuts
expected for 2024 and raise real yields.

Gold Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Gold recently
jumped to retest the broken trendline
following the surprisingly dovish FOMC decision and continued to consolidate
ever since. Technically, the break below the trendline opened the door for a
drop into the 1930 level where we can also find the 61.8% Fibonacci retracement level
for confluence but the
sellers will need a catalyst and some key breaks on lower timeframes to gain
more conviction for such a move.

Gold Technical Analysis – 4
hour Timeframe

On the 4 hour chart, we can see that the price has
been consolidating inside what looks now an ascending triangle. The
price can break on either side of the pattern but what follows is generally a
sustained move in the direction of the breakout. In this case, the buyers will
want to see a break to the upside to position for a rally back into the
all-time high, while the sellers will want to see a break to the downside to
pile in and target a drop into the 1930 level.

Gold Technical Analysis – 1
hour Timeframe

On the 1 hour chart, we can see that we
have a minor downward trendline inside the triangle that is defining the
current downtrend on this timeframe. The buyers might want to lean on the
upward trendline to position for a breakout of the triangle with a better risk
to reward setup. Alternatively, they can also pile in as soon as the price
breaks above the downward trendline. The sellers, on the other hand, are likely
to lean on the downward trendline to position for a drop into the upward
trendline in anticipation of a breakout.

Upcoming Events

Today, the market will focus on the US
Jobless Claims figures as the labour market remains a key spot to watch. A fast
deterioration in the data is likely to increase the rate cuts expected for next
year while strong figures should have the opposite effect.

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