Gold price recently traded lower versus the US Dollar, but found support on the downside. Let’s see if the buyers can push the price back higher.
Gold Weekly Analysis – Can Buyers Protect Downsides?
· Gold price was under a bearish pressure recently against the US Dollar, especially after trading as high as $1352.
· The price moved down, but found support near a bullish trend line formed on the 4-hours chart of XAU/USD.
· Gold price is now below the 100 simple moving average on the same chart, which is a bearish sign.
Gold Price Technical Analysis
Gold buyers after a decent strength against the US Dollar failed to push the price above the $1352 level. As a result, there was a downside move, taking the price below the 100 simple moving average on the 4 hours chart.
Furthermore, the price also closed below the 50% Fib retracement level of the last wave from the $1300 low to $1352 high.
The downside was protected by a bullish trend line formed on the 4-hours chart of XAU/USD. The price is currently recovering higher, but may find sellers near the 38.2% Fib retracement level of the last drop from the $1352 high to $1313 low. In my view, sellers may appear around the stated level.
Trade Idea – Selling rallies near the 100 simple moving average on the 4 hours chart may be considered as long as the price is below it.
During the past two days of this week, there was no major release in the US. The price was mostly driven by the market sentiment. Today, the Chinese New loans report was published by the People's Bank of China. The market was expecting the value of new yuan-denominated loans issued to consumers and businesses to come in at 750.0B.
However, the result was positive, as it came in at 948.7B. Moreover, the Chinese M2 Money Supply report was also on the positive side. The report pointed that the CNY in circulation grew by 13% in August 2016, compared with the same month a year ago. The market was expecting a rise of 10.4% in the Chinese M2 Money Supply in August 2016.