Gold price recently failed to break the $1340 resistance versus the US Dollar, and moved down. Can it continue to trade lower?
Gold Price Weekly Forecast – Is This A Real Break in XAU/USD?
· Gold price after the recent failure to break $1340 traded lower, and cleared a major support area.
· There is a crucial bullish trend line on the H4 chart of XAU/USD, which is almost broken.
· The pair is also below the 100 simple moving average, suggesting more declines in Gold price.
Gold Price Technical Analysis
Gold price recently traded towards $1345 against the US Dollar, but the upside was stopped. There is a monster bearish trend line, which prevented the upside break. The bulls made a couple of attempts to break $1340-45 area, but failed.
As a result, there was a downside move in Gold price. The XAU/USD pair during the downside move broke a bullish trend line on the H4 chart.
Not only that, the price also closed below the 100 simple moving average on the same chart. The recent break looks real, which may further ignite downsides in the near term in Gold price.
Trade Idea – Selling around the broken trend line and resistance area may be considered with a stop above the 100 simple moving average on the H4 chart.
This week, the US saw a major release, as the Consumer Confidence report was published by the Conference Board. It measures the level of confidence that individuals have in economic activity and was forecasted to post a decline to 99.0.
However, the result was above the forecast, as the Consumer Confidence jumped to 104.1. The last reading was also revised to 101.8 from 101.1. Commenting on the positive report, the Director of Economic Indicators at The Conference Board, Lynn Franco, stated “Consumer confidence increased in September for a second consecutive month and is now at its highest level since the recession. Consumers’ assessment of present-day conditions improved, primarily the result of a more positive view of the labor market”.
Overall, the report was positive, which is one of the main reasons why the market sentiment is favoring more gains in the US Dollar this week.