Gold Price Analysis: This chart pattern suggests a break is imminent
|- Gold has moved 0.50% lower on the session as the global risk appetite flip flops.
- There is a wedge pattern on the 4-hour chart and the price is moving toward the end of the pattern.
Fundamental backdrop
It has been a tale of two halves today as in the EU session stock markets sold off but as the US traders entered the fray, markets turned slightly higher. The major resistance in gold has been USD 1708.70 on Monday as it seems consolidation is the way for now.
There was one bit of interesting news in an otherwise dull day. US treasury sec Mnuchin stated that there is a need to step back before a new stimulus round. Not the usual bullish attitude that we have come to expect from the Americans. He also seems to think that the employment figures will get better as the US heads to the summer.
This week there are some more notable data releases to look forward to including CPI from the US, GDP from UK and Germany. Another highlight will be any comments from Fed Chair Jerome Powell on Wednesday. The question of negative rates could be asked as the futures markets have now started to price them in for January 2020.
Technical picture
The 4-hour chart pattern below shows that the consolidation may be reaching its end quite soon. The higher lows and lower highs look to be converging and if previous chart patterns are anything to go by there could be an interesting move in either direction. On the daily chart, the triangle and wedge patterns have yielded good rewards and on the last two occasions, the price moved up over USD 80. If the price does move lower then the USD 1640.00 and USD 1575.00 areas could provide some support are they seem to be pretty strong levels with Fibonacci confluence.
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Additional levels
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