Gold looks to the upside ahead of Powell’s speech


Gold has been on the rise, holding above $1,900 amid hopes for a further cash injection from the government. XAU/USD’s path of least resistance is up ahead of Powell’s speech as technical set up points to the additional upside, FXStreet’s Dhwani Mehta reports.

Key quotes

“Attention remains on the US stimulus talks likely to be continued this Tuesday, as the fundamentals continue to play second fiddle. Trump’s coronavirus updates will be also closely followed for fresh incentives. Speech by the US Federal Reserve (Fed) Chair Jerome Powell will be eyed, as he is due to speak about the US economic outlook at the National Association of Business Economics annual meeting.”

“Gold looks to extend Monday’s rally, having carved out a potential bull flag formation on the hourly chart. A bull flag is a bullish continuation pattern, with the validation likely to occur on an hourly closing above the falling trendline resistance at $1913.51. The pattern target is measured at $1940. The hourly Relative Strength Index (RSI) has turned lower but holds well above the midline, at 53.11, allowing for more upside.”

“To the downside, the falling trendline support at $1906.51 is likely to offer an immediate reprieve to the bulls. A break below which the $1900 mark will be put at risk.”

 

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