Gold to find support at $1946.50 ahead of US Retail Sales


Gold (XAU/USD) extended Wednesday pullback and recovered nearly $200 from three-week lows to end Thursday higher at $1953.60. The yellow continues to tread water around $1950 region heading into the critical US Retail Sales report this Friday as has found support at $1946.50, FXStreet’s Dhwani Mehta reports.. 

Key quotes

“A weaker-than-expected rise in the US Retail Sales data could re-ignite economic recovery concerns and down the dollar, which could possibly bode well for gold. Meanwhile, the bright metal could also benefit, as investors are likely to remain risk-averse amid the US fiscal impasse and ahead of the key US-China trade talks, scheduled on Saturday.”

“Gold ranges within a potential rising wedge formation on the hourly, clinging firmly onto the solid support at $1946.50, which the convergence of the rising trendline and upward-sloping 21-hourly Simple Moving Average (HMA).”

“The hourly RSI inches slightly higher at 54.80, holding well above the midline. This suggests that the price could bounce back to test the bearish 100-HMA at $1964.50. Acceptance above that level is critical to confirm the bullish reversal from the recent brutal sell-off. Further north, the rising trendline resistance $1972 will be next on the buyers’ radars. A fresh rally could be triggered on a break above the latter, opening doors for a test of the horizontal 200-HMA barrier at $1997.”

“To the downside, the bearish continuation pattern will get confirmed on an hourly closing below the abovementioned critical support at $1946.50. The next downside target is aligned at $1933, the horizontal 50-HMA, which is the level to beat for the bears. Sellers will then eye a test of $1907 support on its way to the round figure of $1900.”

 

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