Looking for More Downside Pressure on Gold because of the Yelds
Gold declined 0.63% against the USD and closed at $ 1459.26 per ounce on Friday, amid strength in the US dollar. In the Asian session, the pair XAU/USD is trading around $ 1465.
Gold traders are going to continue to follow the movement in US Treasury yields and the direction of the U.S. Dollar this week. Of particular interest will be the 10-year U.S. Treasury bonds reaction to the 2.06 percent yield (the high from August). Taking out this level could trigger a steep break in gold.
On the technical picture, given the series of doji’s, hammers and pin bars around the resistance 1519.65 it was apparent the level was a key focal point. Therefore, we warn that any weak break of this level increased the odds that price action remains in a complex correction. Yet it didn’t even break before bearish momentum returned.
The yellow metal is showing convergence with its 20-day MA and trading below its 50-day moving average on the hourly chart. Furthermore, on the daily chart the 20-day MA has crossed below the 50-day MA and both of them are now pointing lower. As the long-term bias is for an eventual break to new highs, the bearish bias is over the near-term, and will later seek evidence the correction from the 1557.07 high is nearing completion.
The bearish channel can be used to aid with profit objectives. If a deeper correction extend, we can also use the bullish trend line from the August low. That said, the 1381.91 -1400 zone should also be considered as potential support along the way.
Potential catalysts that could influence the price action next days are U.S.-China trade relations, reports on U.S. consumer inflation and retail sales, and two-days of testimony by Federal Reserve Governor Jerome Powell.
Gold traders are going to continue to follow the movement in US Treasury yields and the direction of the U.S. Dollar this week. Of particular interest will be the 10-year U.S. Treasury bonds reaction to the 2.06 percent yield (the high from August). Taking out this level could trigger a steep break in gold.
On the technical picture, given the series of doji’s, hammers and pin bars around the resistance 1519.65 it was apparent the level was a key focal point. Therefore, we warn that any weak break of this level increased the odds that price action remains in a complex correction. Yet it didn’t even break before bearish momentum returned.
The yellow metal is showing convergence with its 20-day MA and trading below its 50-day moving average on the hourly chart. Furthermore, on the daily chart the 20-day MA has crossed below the 50-day MA and both of them are now pointing lower. As the long-term bias is for an eventual break to new highs, the bearish bias is over the near-term, and will later seek evidence the correction from the 1557.07 high is nearing completion.
The bearish channel can be used to aid with profit objectives. If a deeper correction extend, we can also use the bullish trend line from the August low. That said, the 1381.91 -1400 zone should also be considered as potential support along the way.
Potential catalysts that could influence the price action next days are U.S.-China trade relations, reports on U.S. consumer inflation and retail sales, and two-days of testimony by Federal Reserve Governor Jerome Powell.
Yorum:
The bearish channel support line holds and the price broke above the channel. Follow our next analysis...
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