Gold trading in a strong technical area on the chart
Gold against the US dollar (symbol ‘XAUUSD’) was trading in a steady bullish momentum right up to the FED meeting on Feb. 1st. After the bull flag formation in early November, which is usually a continuation pattern in technical analysis, the price continued to rally up before declining after some positive news on the Dollar last week.
‘The price on the “yellow metal” is slowly increasing after incurring losses following the sudden strengthening of the Dollar. The current level of trading is a strong technical area also so the following sessions are important in “determining” the direction of the bullion in the short run.’ says Antreas Themistokleous, market analyst in Exness ‘investors and traders are keeping their focus on major economic data of next week regarding US CPI which is expected to create some volatility in the market especially around publication time.’
On the technical analysis side after the completion of the bullish flag formation in late November the price continued its bullish rally until last week where the aggressive increase on the Dollar Index pushed the price of gold to the downside. Currently the price is trading in a very strong technical area which consists of the 23.6% of the daily Fibonacci retracement level, the 50 day moving average,the lower band of the Bollinger bands and also the Stochastic oscillator recording an extreme oversold level.
If the combination of these indicators is found strong enough to support the price then the scenario of a bounce to the upside might be witnessed in the following sessions . In such a case the first point of resistance may be around the $1920 - $1930 price area which is made up of the 20 day moving average and also the daily bullish trendline which is valid since early November.
‘The price on the “yellow metal” is slowly increasing after incurring losses following the sudden strengthening of the Dollar. The current level of trading is a strong technical area also so the following sessions are important in “determining” the direction of the bullion in the short run.’ says Antreas Themistokleous, market analyst in Exness ‘investors and traders are keeping their focus on major economic data of next week regarding US CPI which is expected to create some volatility in the market especially around publication time.’
On the technical analysis side after the completion of the bullish flag formation in late November the price continued its bullish rally until last week where the aggressive increase on the Dollar Index pushed the price of gold to the downside. Currently the price is trading in a very strong technical area which consists of the 23.6% of the daily Fibonacci retracement level, the 50 day moving average,the lower band of the Bollinger bands and also the Stochastic oscillator recording an extreme oversold level.
If the combination of these indicators is found strong enough to support the price then the scenario of a bounce to the upside might be witnessed in the following sessions . In such a case the first point of resistance may be around the $1920 - $1930 price area which is made up of the 20 day moving average and also the daily bullish trendline which is valid since early November.