Key Highlights
- Gold price recovered sharply and moved back above the $1,200 support against the US Dollar.
- There was a break above a bearish trend line with resistance at $1,197 on the 4-hours chart of XAU/USD.
- The UK Construction PMI in Sep 2018 declined from 52.9 to 52.1.
- The US ADP Employment figure for Sep 2018 will be released today, which is likely to increase 185K.
Gold Price Technical Analysis
After trading in a broad range above the $1,200 level, gold price started a downside move against the US Dollar. The price tested the $1,180 support and later bounced back above the $1,200 support level.
The 4-hour chart of XAU/USD indicates that the price was under pressure recently and it moved below the $1,185 support. It traded as low as $1,180 and settled below the 100 simple moving average (red, 4-hours).
Later, there was a sharp upward move and the price traded above the $1,200 level and the 50% Fib retracement level of the last decline from the $1,211 high to $1,180 low.
The price even settled above the 100 SMA, 200 SMA (green) and the 61.8% Fib retracement level of the last decline from the $1,211 high to $1,180 low. It seems like the price is back in a positive zone and it could continue to move higher.
On the upside, there is a strong barrier around the $1,210-1,211 zone, which acted as a resistance on multiple occasions. Buyers need to push the price above $1,211 to accelerate gains towards the $1,220 level.
If they fail, there could be a downside correction towards the $1,204 and $1,200 support levels. The most important support is near $1,197 and the 100 SMA.
Looking at major pairs like EUR/USD and GBP/USD, there were mostly bearish moves. The Euro declined below the 1.1550 support and the British Pound broke the 1.3025 support area against the US Dollar.
Economic Releases to Watch Today
- Germany’s Services PMI for Sep 2018 – Forecast 56.5, versus 56.5 previous.
- Spanish Services PMI for Sep 2018 – Forecast 52.9, versus 52.7 previous.
- Euro Zone Services PMI for Sep 2018 – Forecast 54.7, versus 54.7 previous.
- UK Services PMI for Sep 2018 – Forecast 53.9, versus 54.3 previous.
- US Services PMI for Sep 2018 – Forecast 53.6, versus 52.6 previous.
- US ADP Employment Change Sep 2018 – Forecast 185K, versus 163K previous.
- US ISM Non-Manufacturing Index for Sep 2018 – Forecast 58.0, versus 58.5 previous.
