Spot Gold accelerated higher and hit fresh session high (also the highest since 14 June), receiving fresh boost from lower than expected US ISM Manufacturing PMI numbers which pressured the dollar.
Strong uptrend from $1204 (10 July low) approached its next target at $1274 (Fibo 76.4% of $1296/$1204 descend), with $1280 (14 June spike high) also being in focus.
Past three weeks action was shaped in three long bullish weekly candles, with monthly performance being also positive in July (bullish monthly candle with long tail) which is seen as strong bullish signal, along with firm bullish setup of daily technical studies.
Overbought conditions so far did not affect gold’s bulls but corrective action should be anticipated in the near term, as daily cloud is twisting later this week and may attract for pullback.
Today’s strong downside rejection at $1262, which is the session low, marks initial support, along with broken Fibo 61.8% barrier at $1261, followed by rising 10SMA (1257) and daily Tenkan-sen ($1254) which guard key support at $1249 (weekly cloud top).
US labor data due on Friday will be closely watched for fresh signals.
Res: 1274; 1280; 1288; 1296
Sup: 1262; 1257; 1254; 1249
