Key Highlights
- Gold price started a downside move from the $1,355 level against the US Dollar.
- There was a break below two bullish trend lines at $1,345 and $1,335 on the 4-hours chart of XAU/USD.
- The US Existing Home sales in March 2018 grew 1.1%, more than the +0.2% forecast.
- Today, the US New Home Sales report for March 2018 will be released, which is forecasted to post a 1.9% rise in sales.
Gold Price Technical Analysis
There was a major top formed above the $1,355 level in gold price against the US Dollar. The price declined sharply and broke many important supports near $1,335 to move into a bearish zone.
Looking at the 4-hours chart, there were back to back bearish candles from the $1,354 swing high. The price declined and broke the 50% Fib retracement level of the last wave from the $1,319 low to $1,365 high.
More importantly, there was a break below two bullish trend lines at $1,345 and $1,335 on the 4-hours chart of XAU/USD. It also declined below $1,330, and the 200 simple moving average (green, 4-hour) and the 100 simple moving average (red, 4-hour).
These are negative signs, which could ignite more declines in Gold price in the near term. The next stop for sellers could be near the 1.236 Fib extension of the last wave from the $1,319 low to $1,365 high.
On the upside, the broken support near $1,335 and the 200 simple moving average (green, 4-hour) will most likely act as resistances if the price corrects higher.
Recently, the US Existing Home Sales report for March 2018 was released by the National Association of Realtors. The market was looking for a 0.2% rise in sales compared with the previous month.
The actual result was better as there was a rise of 1.1% in sales to a seasonally adjusted annual rate of 5.60 million. However, the current reading was less than the last +3.0%.
Overall, gold price has moved into a bearish zone and it may perhaps decline further towards the $1,310 level.
Economic Releases to Watch Today
- German IFO Business Climate Index for April 2018 – Forecast 102.6, versus 114.7 previous.
- US New Home Sales for March 2018 (MoM) – Forecast +1.9% versus -0.6% previous.
