Price of gold declined in recent sessions after a stronger Dollar Index.The US Dollar Index (DXY) made gains in the last 5 sessions which is making gold more expensive for other currency holders. Even though some may say that the correction to the downside is only temporary, there is further downside risk for gold as surging momentum in the U.S. labor market could force the Federal Reserve to maintain its aggressive policy stance longer than expected.
From the technical point of view the price broke below the daily bullish trendline and is currently facing support on the 50 day moving average and the lower band of the Bollinger bands around the $1,870 area. If we see the price continuing to decline in the coming sessions we might expect the next point of support around the $1,830 price area which consists of the 38.2% of the daily Fibonacci retracement level and also the psychological support of the round number.
The Stochastic oscillator is showing extreme oversold conditions which might signal that resuming the overall bullish movement is a possible scenario given that the current support area proves to hold strong. In such case of a continuation to the upside we might see some resistance around the $1,925 area which is a point on the bullish trendline (that is now acting as a resistance since it’s above the price level) and is also the area of the last reaction level of the price in late January.
From the technical point of view the price broke below the daily bullish trendline and is currently facing support on the 50 day moving average and the lower band of the Bollinger bands around the $1,870 area. If we see the price continuing to decline in the coming sessions we might expect the next point of support around the $1,830 price area which consists of the 38.2% of the daily Fibonacci retracement level and also the psychological support of the round number.
The Stochastic oscillator is showing extreme oversold conditions which might signal that resuming the overall bullish movement is a possible scenario given that the current support area proves to hold strong. In such case of a continuation to the upside we might see some resistance around the $1,925 area which is a point on the bullish trendline (that is now acting as a resistance since it’s above the price level) and is also the area of the last reaction level of the price in late January.