Gold ready for a falling wedge breakout on a close above $1913.50
|Gold (XAU/USD) extends its three-day winning streak into Wednesday, mainly underpinned by the progress on the US fiscal stimulus talks, which diminished the haven demand for the US dollar. FXStreet’s Dhwani Mehta eyes Wednesday’s close as the yellow metal is set to see a likely falling wedge breakout on a close above $1913.50.
See: Gold needs to clear the $1,973 September high to resume the uptrend – Standard Chartered
Key quotes
“It remains to be seen if the yellow metal can see a sustained move higher, as the US 10-year Treasury yields hold near four-month highs on the stimulus optimism. President Donald Trump agreed on a large multi-trillion aid bill, in order to clinch a deal ahead of the November 3 election. The stimulus talks are likely to continue later on Wednesday and therefore, the sentiment on the global markets and US dollar dynamics will play a pivotal role for fresh gold trades.”
“As observed in the daily chart, gold has dived out from the three-month-long falling channel formation, with closing above the falling trendline resistance at $1913.50 needed on a daily basis to validate a bullish breakout.”
“The downward sloping 50-daily moving average (DMA) at $1925 is likely to challenge the bulls’ commitment in the near-term. A sustained move above the latter could expose the October 12 high of $1933.30, beyond which the psychological $1950 level will come into play.”
“Meanwhile, the bullish bias remains intact so long as the price holds above the 21-DMA at $1896. Acceptance below the latter could open floors for a test of the 100-DMA, now aligned at $1877.”
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