Gold’s recovery faced stiff resistance just below the $1770 level. XAU/USD set to fall? Technicals are set to outweigh Evergrande risks, FXStreet’s Dhwani Mehta briefs.
Gold price looks to resume the downside after Monday’s rebound
“A minor improvement in the risk sentiment amid stabilizing Hong Kong equities and conciliatory comments from China Evergrande Chief caps gold’s recovery gains.”
“Fed’s tapering plan appears intact, despite the latest China worries. The risk rebound could pick up pace, extending the rebound in the Treasury yields while lifting the demand for the greenback once again. In such a case, XAU/USD will likely resume its downside.”
“The 21-Daily Moving Average (DMA) is set to pierce the 50-DMA from above. If such a move materializes, then it would confirm a bear cross, opening floors for a fresh downswing towards the multi-week troughs near $1740. The $1700 psychological magnate will be on the sellers’ radars should the monthly lows give way.”
“A sustained move above the $1767 supply zone is needed to unleash the recovery gains towards the 21 and 50-DMA confluence near $1795. Gold bulls will then aim for the horizontal 200-DMA at $1807, as the next upside target.”
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