Spot gold edged higher on Friday and probed above $1900 barrier, inflated by weaker dollar after signals that rising US inflation, which made a biggest annual increase almost 13 years, was insufficient to push Fed to start changing its stance over ultra-loose monetary policy.
The US central bank expected to signal a strategy of a gradual reduction of its massive bond-buying program probably in August or September policy meeting, but is unlikely to act until early 2022 that leaves a plenty of space for the yellow metal to rise.
Fresh attempts higher need a clear break of $1900 zone (bear-trendline off $1916, June 1high/Fibo 76.4% of $1916/$1855 bear-leg) to complete bullish wedge pattern on daily chart and signal an end of $$1916/$1855 corrective phase.
Bullish daily studies underpin the action which looks for clear break of $1900 zone to focus next key barrier at $1922 (Fibo 61.8% of $2074/$1676 pullback), with break here to signal reversal of the downtrend from $2074 all-time high).
Caution of overbought weekly stochastic which signals prolonged consolidation.
Initial support lays at $1889 (rising 20DMA/session low), with near-term bulls expected to remain in play while the price action holds above the lower wedge pattern boundary ($1874).
Res: 1903; 1916; 1922; 1928.
Sup: 1889; 1885; 1874; 1864.
Interested in XAU/USD technicals? Check out the key levels
- R3 1938.93
- R2 1919.44
- R1 1908.83
- PP 1889.34
- S1 1878.73
- S2 1859.24
- S3 1848.63
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