XAU/USD outlook: Gold remains constructive above $2,300, key US data eyed for fresh signals
Gold price is trading within a narrow range on Wednesday, following nearly 3% drop in past two days, which cracked psychological $2300 support, but failed to sustain break lower, contained by daily Kijun-sen ($2289)
Tuesday’s action formed a hammer candlestick, generating an initial signal of reversal of the limited pullback which could be for now described as a healthy correction.
In addition, bear-trap under rising 20DMA may further boost the signal however, more action at the upside will be required to confirm.
Near-term bias is expected to remain with bulls while the price stays above $2300 level, with repeated close above 20DMA ($2324) to reinforce near-term structure for acceleration through $2340 (Fibo 38.2% of $2417/$2291) and close above 10DMA ($2358) to confirm reversal.
Fourteen-day momentum reversed north above the centre line, pointing to existing bullish momentum and RSI stays above neutral 50 zone.
Caution on firm break of pivotal supports at $2300 and $2289, which would increase the risk of deeper pullback.
Markets focus on key economic releases from the US this week (Q1 GDP on Thursday and PCE price index, Fed’s preferred inflation gauge) which would provide more clues about the Fed’s interest rate path and generate fresh signals for the yellow metal.
Res: 2340; 2358; 2369; 2388
Sup: 2324; 2300; 2289; 2260
Interested in XAU/USD technicals? Check out the key levels
Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
