Gold price was under pressure this past week against the US Dollar, but later recovered. Can XAU/USD break the $1270 resistance for a move higher?
Gold Price Weekly Analysis – Can Buyers Break This?
· Gold price this past week traded as low as $1245 against the US dollar where buyers appeared.
· There is a crucial bearish trend line formed on the 4-hours chart of XAU/USD, which is currently acting as a resistance near $1265-70.
· A break above it may call for a move towards the $1285 resistance.
Gold Price Technical Analysis
This past week we saw some strength in the US Dollar, and as a result, gold price fell and tested the $1245 support zone. The buyers later managed to defend the downside move, and currently attempting a recovery.
However, it won’t be easy for them to take the price higher since there is a huge hurdle at $1265-70. There is a confluence resistance near $1265-70 in the form of a crucial bearish trend line formed on the 4-hours chart of XAU/USD.
The 100 simple moving average on the same chart is also positioned near the trend line. So, the $1265-70 resistance is a monster barrier for the bulls. If they succeed in breaking it, there are chances of a move towards the 50% Fib retracement level of the last decline of $1327 high to $1241 low. A failure may take the price back towards the $1250 support.
Trade Idea – If you are looking to enter a buy trade, then consider it with a break above the trend line resistance with a tight stop to target $1280-85.
This week may be an eventful week for the US Dollar, as there are a few important releases lined up. Like today, the US Manufacturing Purchasing Managers Index (PMI) will be reported released by the Markit Economics. The forecast is lined up for a minor increase from the last reading of 51.5 in Oct 2016 (preliminary).
Tomorrow, the Consumer Confidence index will be released by the Conference Board, which is forecasted to decrease from 104.1 to 102 in Oct 2016. If there is a major deviation in the result, gold prices may gain traction and break the $1265-70 resistance going forward.