Gold Technical Analysis | Forexlive

Gold has been rising steadily since the last FOMC
rate decision where the Fed surprisingly leant on the dovish side and triggered
big moves across the markets. The prospect of a rate cut cycle is a bullish
driver for Gold given its close inverse relationship with real yields.
Unfortunately, the market’s pricing for rate cuts might have gotten a bit too
aggressive which could lead to some quick drops if the US data comes out strong
in the next few weeks or months. As long as the current market’s narrative holds,
we can expect Gold to keep printing new higher highs.

Gold Technical
Analysis – Daily Timeframe

On the daily chart, we can see that Gold has been
rising steadily since the last FOMC meeting with the price recently reaching
the key resistance zone
around the 2080 level. The buyers are certainly targeting a new all-time high
after the disappointing huge reversal we saw the last time. From a risk
management perspective, the buyers will have a much better risk to reward setup
around the trendline,
although such a drop looks unlikely at the moment unless the data comes out
surprisingly strong.

Gold Technical Analysis – 4
hour Timeframe

On the 4 hour chart, we can see that Gold looks to
be trading inside a rising channel with the price bouncing recently on the
lower bound of the channel. The buyers piled in to position for a rally into
the upper bound of the channel around the 2100 level. The sellers, on the other
hand, should wait for the price to break the channel to the downside to confirm
a drop into the major trendline around the 2020 level.

Gold Technical Analysis – 1
hour Timeframe

On the 1 hour chart, we can see that the
bullish move has already started so late buyers should wait for a pullback
instead of chasing the price at the highs. We have a good support zone around
the 2068 level where we can find the confluence with
the recent swing high, the trendline and the 50% Fibonacci
retracement level. That’s where the buyers are likely
to step in with a defined risk below the trendline and target the 2100 level.

Upcoming Events

This week is full of key economic data which will
culminate with the NFP report on Friday. We begin tomorrow with the ISM
Manufacturing PMI and Job Openings and given the recent trends there could be
room for disappointment. Later in the day, we will get the release of the FOMC
Minutes, but it’s not expected to be market-moving given that it’s three weeks
old data. On Thursday, we will have another slate of US labour market data with
the release of the US ADP and Jobless Claims figures. Finally, on Friday, we conclude
the week with the NFP report and the ISM Services PMI.

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