XAU/USD outlook: Gold remains within extended range, awaiting fresh signals from Powell
|GOLD
Spot gold is trading in a choppy range for one week, awaiting fresh direction signals, with today's speech of Fed Chairman Powell, being a key event. The price action in past few days manages to stay above key support at $1920 (Fibo 38.2% of $1670/$2074) bull-leg/former all-time high of 2011) despite few spikes lower. The pullback from new record high so far found solid ground but recovery attempts stalled, keeping near-term action in triangular consolidation. Daily studies lack clear signal as momentum has bottomed and turning up, 10/20/30 MA's are in mixed setup and RSI is flat. Weekly chart shows Doji candle of last week and this week's action being so far in the same shape that points to significant indecision, which is re-confirmed by long-legged Doji candle of August. Break of either side of the range ($1902/61) would generate initial direction signal. Rally would require break of 20DMA ($1970) and more significant $2000/$2015 levels (psychological/18 Aug recovery high) for confirmation of reversal. Conversely, break of $1920/02 pivots would expose correction's spike low at $1862 and risk deeper pullback on break. Fed Chairman Powell is expected to start laying out Fed's new strategy for price stability and employment goals, amid deep economic crisis on coronavirus pandemic and ahead US elections. Fed is looking for a transformation of the way it manages the monetary policy, in attempts to adjust to the new conditions in the world where interest rates and inflation figures are constantly low. Some market observers expect dovish tone from Powell that would again hurt risk sentiment, while workable plan in current economic conditions with more details of the steps how to enact the new strategy would boost risk appetite.
Res: 1961; 1970; 1979; 2000
Sup: 1937; 1920; 1911; 1902
Interested in XAU/USD technicals? Check out the key levels
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.