Gold: Failure to cross immediate resistances please sellers amid USD recovery

The bullion trades below technical resistances amid greenback strength.
The US traders’ response to the latest market catalysts and second-tier data will be in the spotlight.

Anil Panchal FXStreet

Not only 50-day and 200-day SMA but failure to cross immediate descending trend-channel and the US Dollar (USD) recovery also portray the yellow metal’s weakness that drags it to $1283.40 ahead of the European open on Tuesday.

Prices have been lackluster on Monday as the absence of the US and the UK traders from markets dimmed reaction to the EU Parliament results.

However, the greenback was on a recovery mode as the the rise of eurosceptic parties and victory of the Brexit party weakened the Euro (EUR) and the British Pound (GBP) respectively.

It should also be noted that the absence of negative statements from the US President Donald Trump’s Japan visit took over the news conveying Mr. Trump’s likeliness of having no trade deal with China.

The US 10-year treasury yield, known as the global risk barometer, is in the negative region to 2.306% after observing a halt of yesterday.

Investors may now await fresh directives from the US players’ reaction to the latest political, trade-related news report. Few second-tier data relating to the US housing, manufacturing and consumer sentiment are also on the cards.

Technical Analysis

FXStreet Analyst, Ross J. Burland, spots sustained trading beyond 20-DMA and bullish stochastic as reasons to aim for $1290:

Bulls can target the 61.8% Fibo at 1290 ahead of 1297 as the trend line/channel resistance. 1303 is recent swing fractal high. A re-run of the downside, however, will open prospects for the double bottom lows at 1266 ahead of 1262. Below there, the 200 DMA is located at 1257 while 1251 marks the 10th Dec swing highs.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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