This article was submitted by Aaron Hill from FP Markets.
Week to date, spot gold in dollar terms is down more than 2.0%, following a one-sided push south on Thursday. Upside in US Treasury yields, together with the US Dollar Index navigating higher levels, left the precious metal -1.0% lower at the close of European trading.
Technically speaking, this week’s downside should not raise too many eyebrows.
Following a near-test of the all-time high of $2,075, weekly support from $1,928-$1,960 entered the frame in May but failed to attract much bullish intent. Last week also saw the unit clip the lower side of the aforementioned support. With recent selling extending last week’s spike lower, sell stops are likely filled south of the support (a combination of breakout sell stops and protective stop-loss orders), and with room to press as far south as weekly support at $1,807, further selling could be in the offing.
Across the page on the daily timeframe, support at $1,919 appears to be hanging by a thread. This level is key. Clearance of this base would technically hand the baton to sellers to run for support from $1,866, which shares chart space with the 200-day simple moving average (red – $1,850).
Technicians will also note that the daily timeframe continues to chalk up an early downtrend (lower lows/highs). This, together with the weekly and daily timeframes now both showing average losses exceeding average gains (negative momentum – Relative Strength Index [RSI] below the 50.00 centreline), adds weight to the idea that sellers could remain in the driving seat for now, particularly if the daily price convincingly closes under the daily support at $1,919.
Weekly Chart:
Daily Chart:
Charts: TradingView
Yesterday’s report: DTechnical analysis: GBP/USD ahead of CPI data … Read More
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