Gold Price Analysis: XAU/USD eyes $1840, shrugging off overbought conditions
The price of gold finally raced past the $1800 psychological level. The yellow metal is extending the recent upsurge, sitting at a new 11-month top at $1822, as the bulls take a breather, in anticipation of the all-important US NFP report. In the view of FXStreet’s Dhwani Mehta, XAU/USD eyes $1840 after the technical breakout on the 4H chart.
See – Gold Price Analysis: Softer demand from central banks and jewellery to cap any upside – HSBC
Overbought RSI conditions caution bulls ahead of the key NFP data
“The US economy is seen adding 978K jobs in April vs. 916K reported previously. A big NFP blowout is needed to revive the Fed’s tapering talks, which could likely trigger a sharp correction in gold. However, disappointing figures would back the central bank’s dovish approach, fuelling further upside in gold.”
“Gold’s four-hourly chart shows that the price extended the upside break from the rounding bottom formation. The next barrier awaits at the $1830 round figure, above which the pattern target measured at $1840 could be tested.”
“With the Relative Strength Index (RSI) holding in the overbought region, a pullback towards Thursday’s close of $1815 cannot be ruled. Further south, the $1800 mark could protect the downside. The pattern neckline resistance now support at $1798 will be the level to beat for the gold bears.”
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FXStreet Insights Team
FXStreet
The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.
