Gold Recovers Seeing Weakness In U.S Dollar, Eyes on U.S Data
Gold rallied to 1306.10 high on Monday but failed to press forward, and started deep retracements. It ended today with at 1276.70 low, currently XAUUSD is trading 1286 after clocking 1288 high.
On technical level, since gold closed above 1296, the trend shifted up, and its failure to close below 1280 (Daily) kept the bull forces in action. At the moment we are seeing two scenarios that awaits gold.
First scenario is that gold will extend price correction towards 1290+ levels and could end the rally at 1295, forming a head-and-shoulders pattern, then the daily candle will turn bearish, and the market should prepare for deeper retracement exceeding today's low aimed at the 1258+ zone.
The second scenario is that gold will reach the 1290+ area and closes above 1296, which will set the precious metal on the track to the 1305+ area, washing the head-and-shoulders pattern. In the case that gold manages to close above 1305-08, then the market should expect a search for higher levels aimed at 1315+/-. Both scenarios will be affected by the DXY (U.S Index) performance, as U.S releases Unemployment claims today at 12:30 PM GMT.
Technical overview XAUSUD:
Current Price: 1286
Closing Price: 1281
Target: 1308 ? ?
Resistance levels: 1286 (10-EMA) , 1290 (20-EMA lined with 50 EMA) , 1295-96
Support levels: 1280.90, 1276, 1270
Trend reversal: 1279
General Overview: The market is showing a near-term secondary selloff, calling for a test of the 1279.20* support. Look for follow through selling today. A close under 128020* targets declines back through the 1270s. Any corrections capped by 1291.80* will favors further declines. A close over 1296.80* is needed to flip back to bull trending.