Gold sits above 100-day EMA for the first time since May 10

Gold climbed 100-day exponential moving average (EMA) yesterday, its first break above the long-term EMA in five months.
The bearish divergence of the relative strength index seen on the 4-hour chart indicates that 100-day EMA could be put to test again.

Omkar Godbole FXStreet Contributor

Gold closed above the 100-day EMA yesterday, adding credence to bullish break of the six-month-long falling trendline witnessed last week.

At press time, the yellow metal is trading at $1,230, having clocked a three-month high of $$1,236.90 yesterday.

Prices found acceptance above the 100-day EMA in the last 12 hours, courtesy of a 40 pip drop in the dollar index below 95.00.

A convincing move above the 100-day EMA adds credence to last week's upside break of the trendline connecting the Apr. 11 high and June 14 high. So, it seems safe to say that for gold, the path of least resistance is on the higher side.

However, the relative strength index (RSI) on the 4-hour chart has carved out a bearish divergence. As a result, a pullback to 100-day EMA support of $1,226 (former resistance) could be in the offing, before further upside unfolds.

Gold Technical Levels

Resistance: $1,237 (July 3 low), $1,260 (Oct. 6, 2017 low), $1,262 (July 9 high)

Support: $1,226 (100-day EMA), $1,217 (Aug. 28 high), $1,215.80 (Sept. 21 high)

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bullish	Neutral	Expanding
1H	Bearish	Neutral	Low
4H		Neutral	Low
1D	Bullish	Overbought	High
1W	Bullish	Neutral	Low
Updated Oct 16, 02:30 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD trims losses, back to 1.1830

EUR/USD manages to regain some composure, leaving behind part of the earlier losses and reclaim the 1.1830 region on Tuesday. In the meantime, the US Dollar’s upside impulse loses some momentum while investors remain cautious ahead of upcoming US data releases, including the FOMC Minutes.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Crypto Today: Bitcoin, Ethereum, XRP upside looks limited amid deteriorating retail demand

The cryptocurrency market extends weakness with major coins including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trading in sideways price action at the time of writing on Tuesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.