Gold Technical Analysis | Forexlive

The
recent stronger than expected US data weighed on Gold as the risk of a hawkish
Fed increased. In fact, the US real yields and the US Dollar rallied recently
which put downward pressure on the market. In the bigger picture, Gold should
remain supported as we head into the easing cycle, but in the short-term,
strong US data is likely to delay rate cuts and weigh on prices.

Gold Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Gold has been
pulling back from the highs and it’s now near the previous all-time high around
the 2142 level. This is where we can expect the buyers to step in with a
defined risk below the level to position for a rally into a new all-time high.
The sellers, on the other hand, will want to see the price breaking lower to
increase the bearish bets into the 2080 support zone.

Gold Technical Analysis – 4
hour Timeframe

On the 4 hour chart, we can see that from a risk
management perspective, the buyers will have a much better risk to reward setup
around the 2080 level where we can also find the confluence with the
trendline and the 50%
Fibonacci retracement level.
As of now, the bias remains tilted to the downside, but we will need to watch
out for the FOMC rate decision and the US data as they can change the setups.

Gold Technical Analysis – 1
hour Timeframe

On the 1 hour chart, we can see that we
have some resistance around the 2151 level where we can find the confluence of
the recent swing low level and the minor downward trendline. This is where we
can expect the sellers to step in with a defined risk above the trendline to
position for a break below the 2142 level with a better risk to reward setup.
The buyers, on the other hand, will want to see the price breaking higher to
invalidate the bearish setup and position for a rally into the major downward
trendline around the 2165 level.

Upcoming Events

This week we have the FOMC rate decision on Wednesday
where the Fed is expected to keep rates unchanged. The market will be on the
lookout for hawkish surprises though following the stronger than expected
inflation data. On Thursday, we conclude with the latest US PMIs and Jobless
Claims figures. A hawkish Fed and strong data is likely to weigh on Gold, while
a dovish Fed and weak figures should give it a boost.

See the video below