Gold Technical Analysis | Forexlive

The
big miss in the US ISM
Manufacturing PMI triggered an incredible rally in Gold as real
yields started to fall amid weaker US data. As previously mentioned, Gold
should be supported in the big picture heading into the easing cycle, but in
the short-term strong US data could weigh on it because it would make the
market to price out rate cuts and lift the real yields. Since the data started
to come out weaker than expected, it caused a stronger reaction because it was
in line with the big picture fundamentals. Today, we have the US NFP on the agenda where a hot
report will likely send Gold quickly lower while a weak release should give it
another boost.

Gold Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Gold broke
through the trendline and
surged to a new all-time high following a set of weaker than expected US data.
No resistance could
stop this rally as the FOMO kicked in and the sellers got squeezed hard. The
price is now a bit overstretched though as depicted by the distance from the
blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move.

Gold Technical Analysis – 4
hour Timeframe

On the 4 hour chart, we can see that from a risk
management perspective, the buyers will have much better risk to reward setups
around the 38.2% Fibonacci retracement level
where they will also find the confluence with the
daily 8 moving average, and the 61.8% Fibonacci retracement level around the
previous resistance now turned support at 2080.
The sellers, on the other hand, will likely pile in at every break lower.

Gold Technical Analysis – 1
hour Timeframe

On the 1 hour chart, we can see that the
price has been diverging with
the MACD for a
few days. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. In this case, it should signal at least a pullback from
these levels although the economic data can easily invalidate everything. The
buyers might want to split their orders as the price can bounce from either
Fibonacci level. The sellers, on the other hand, will want to see the price
breaking every support level to keep piling in and target new lows.

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