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.
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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