Gold On The Edge Of Turning Bullish Ahead Of FOMC Statement
FxGrow | Oct 11, 2017 06:27
Gold has surged $34 since Friday, and clocked a high of $1,294.30 yesterday, giving positive signs of trend reversal and turning bullish and could close above $1,295 in the coming days. On the other hand, renewed tension between U.S. and North Korea is attracting safe-haven buyers, pushing gold higher. Add to that, the DXY continues to show weakness with a 92.87 low today giving XAU/USD more chance to seek a higher price.
Technically, on the daily chart, gold has closed above 10-EMA for the third consecutive session, and we can notice that the daily 5-EMA crossing below with 10-EMA. On the H4 time frame, gold rallied from $1,260 and closed first at $1,278, then $1,288, and, finally yesterday, gold closed above $1,292. This is an additional early sign giving that the H4 closing time is going on higher H4 levels.
Today, as FOMC statement will be released, we will see how gold behaves and how it closes the day and on four-hour time frame. If gold tests $1,280+ support and manages to reject these prices, then market should expect further rallies to extend, to $1,295 and $1,300+. If gold shows deeper retracement, and closes below $1,278, it will be an indication that the precious metal has entered the old range, between $1,200 and $1,296, and recent rallies were a correction phase preparing for deeper dips aimed at $1,260+/-.
Technical Overview XAU/USD
Closing price: 1287.70
Trend: Sideways / Bearish
Resistance levels: 1291, 1295, 1299
Support levels: 1288, 1282, 1279-77
Trend reversal: 1295.20
Comment: The market is showing a correction, trying to retrace for a test of key 1295.20* resistance and challenge for a bottoming turn. Trade may again try to foster rallies, but trade capped by 1295.20* will retain bear forces, likely easing for defensive congestion along 1282.00. A close under 1277.70* alerts for secondary selloffs against Friday's spike.
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