Chart of the Week - Gold consolidating above Key Support

Chart of the Week - Technical Analysis

• · Gold consolidating above Key Support.
• · Oil bounced back ahead of US CPI and China Economic Data.

XAU USD / Gold consolidating above Key Support.

• Resistance Zone: $1890 to $1910
• Key Resistance: $1865
• Major Pivot Point: $1830
• Key Support Level: $1800
• Support Zone: $1760 to $1740
• 200 Day SMA – Green Line
• 50 Day SMA – Red Line
• CBOE VIX – Volatility Index @ 30.96 – 4.86 (+18.62%)

Trade Insights - XAU/USD

XAU/USD – Chart shows Viable long positions above the Pivot at $1830 with the first target of Key Resistance Level @ $1865 and after consolidation above the resistance level then moving target higher towards the Resistance Zone at $1890 to $1910.

Alternatively, Short positions below the Key Support level are $1800 with the target to head towards the Support Zone between $1760 to $1740.

XAU/USD Chart Analysis:  Directional bias - 2 Weeks 

The gold chart shows that the gold prices have been dropping in the same fashion they went up at the beginning of the year. The Downtrend depicting descending channel on the chart currently shows that prices could go as low as $1780. It reaches the lowest point of Ascending channel when the gold uptrend begins in January. The recent trough pair formed was to touch $1880 but the price bounced back to move above the Key Support level at $1800 in the same session, but the recovery was short-lived. Prices are now struggling to move above $1830 the Major Pivot on the chart as it would indicate if any recovery had to happen of Downtrend Breakout has to occur.   

The RSI Indicator is going flat just around 33 points and looks like investors are contemplating their next move from here on.  The prices are trading well below the 50-day SMA red line that has started to turn down and a little below the Green 200 Day SMA line indicating a bearish bias of the investor.

Fundamental Overview:

The gold selloff has apparently paused rather than any bigger trend reversal shaping up on the chart. After falling to a fresh lower low around $1786 the prices are struggling to take off.  The dollar index (DXY) has traded lower from the recent peak of 105 to just under 104 now but has no follow-through action on gold as the moves lacked conviction.

Click to see Market Insight: