Gold outlook: Strong bounce generates initial reversal signal
|XAU/USD
Gold jumped over 2% on Monday, lifted by weaker dollar and persisting uncertainty over US-China trade conflict that revived safe-haven demand.
Strong bounce followed repeated failure to register clear break of strong support at $3228 (50% retracement of $2956/$3500 upleg / daily Kijun-sen).
The metal’s price returned above $3300 mark and cracked important resistance at $3315 (10DMA / Fibo 38.2% of $3500/$3201 bear-leg) to generate signal that corrective phase from new all-time high may be over.
Reversal signal is developing on daily chart, as 14-momentum bounced into positive territory after touching the centreline, daily MA’s are about to turn to full bullish configuration, while today’s large bullish candle contributes to formation of reversal pattern.
Ability to hold above $3300 would keep near term bias with bulls, and daily close above $3315 to validate signal and open way for further recovery and expose targets at $3351 / $3386 (Fibo 50% and 61.8% retracement of $3500/$3201 respectively).
Markets will keep a close eye on development of US-China case and will also look for fresh signals about Fed’s monetary policy trajectory, as the FOMC meets this week and will announce its rate decision late Wednesday.
Res: 3328; 3351; 3370; 3386.
Sup: 3300; 3272; 3228; 3201.
Interested in XAU/USD technicals? Check out the key level
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.