Key Highlights
- Gold price started a downside correction from the $1,703 high.
- A key bullish trend line is forming with support near $1,650 on the 4-hours chart of XAU/USD.
- EUR/USD and GBP/USD corrected gains, but remain supported on dips.
- The US CPI could increase 2.2% in Feb 2020 (YoY), down from the last 2.5%.
Gold Price Technical Analysis
This month, gold price resumed its upward move above the $1,650 resistance against the US Dollar. The price gained bullish momentum above the $1,680 resistance and even broke the previous multi-month high.
The 4-hours chart of XAU/USD indicates that the price traded to a new multi-month high at $1,703 and it settled well above the 100 simple moving average (red, 4-hours) and the 200 simple moving average (4-hours, green).
Recently, there was a downside correction below the $1,680 level. The price traded below the 23.6% Fib retracement level of the upward move from the $1,562 low to $1,703 high.
However, there are many supports on the downside near the $1,650 and $1,640 levels. The main support is near the $1,632 and $1,630 levels (the previous breakout zone).
Besides, the 50% Fib retracement level of the upward move from the $1,562 low to $1,703 high is also near the $1,632 level to provide support. Therefore, dips in gold price remain supported near $1,640 and $1,630.
On the upside, the price could face hurdles near the $1,680 level, above which the bulls are likely to make another push above the $1,700 barrier in the coming days.
Looking at EUR/USD, the pair remains well supported above 1.1300 and 1.1250. Similarly, GBP/USD is likely to find a strong buying interest near 1.2920 if it further corrects lower.
Economic Releases to Watch Today
- UK Industrial Production Jan 2020 (MoM) – Forecast +0.3%, versus +0.1% previous.
- UK Manufacturing Production Jan 2020 (MoM) – Forecast +0.2%, versus +0.3% previous.
- US CPI Feb 2020 (MoM) – Forecast 0%, versus +0.1% previous.
- US CPI Feb 2020 (YoY) – Forecast +2.2%, versus +2.5% previous.
- US CPI Ex Food & Energy Feb 2020 (YoY) – Forecast +2.3%, versus +2.3% previous.
