Intraday market analysis: Gold attempts to rebound
|XAU/USD awaits breakout
Gold inched higher as the dollar index hit a two-week low.
The latest rebound has been checked by the psychological level of 1800. With the RSI showing an overbought situation, short-term buyers were swift in taking profit from this resistance on the daily chart.
The pullback has met buying interest over 1760. There is an expectation for sideways action in the next few hours as traders wait for a breakout. A deeper correction would test the floor at 1730, while a higher high may send the precious metal to the triple top at 1830.
EUR/GBP breaks below support
The sterling soared after BOE Governor Bailey said that the central bank may act to contain inflation.
Sentiment has become increasingly bearish over the euro after its break below August’s low at 0.8450. A bearish MA cross on the daily chart indicates an acceleration to the downside.
An oversold RSI has led to a limited rebound towards 0.8485, which may turn out to be an opportunity to sell into strength. 0.8350 near February 2020’s lows would be the next target when momentum traders jump in to bid up the pound.
US 30 recovers to previous peak
The Dow Jones rallies as investors look past macro concerns and focus on earnings instead.
The break above the supply zone around 35000 has prompted the bears to cover. The index then went on to recoup most losses from the September sell-off. With the short-side out of the picture, sentiment might have turned around.
35500 is a major resistance and a bullish breakout would resume the uptrend for new all-time highs. As the RSI suggests an overextension, 35050 is fresh support in case of retracement.
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