Can Gold Price Recover Above $1,260 In Near Term?04 July, 2018 by Aayush Jindal in Market Analysis
- Gold price declined recently and tested the $1,240 support area against the US Dollar.
- There was a break above a declining channel with resistance at $1,248 on the 4-hours chart of XAU/USD.
- The US Factory orders in May 2018 increased 0.4%, more than the forecast of 0%.
- Today in the Euro Zone, the Services PMI for June 2018 will be released, which is forecasted to remain at 55.0.
Gold Price Technical Analysis
This past week, there were heavy declines in gold price from well above the $1,265 level against the US Dollar. The price traded below the $1,260, $1,255 and $1,250 support before buyers appeared.
There was a break below the $1,240 support as well, but the price recovered quickly. A low was formed at $1,237.94 before the price started an upward correction.
It traded above the 50% Fib retracement level of the last decline from the $1,372.57 high to $1,237.94 low. More importantly, there was a break above a declining channel with resistance at $1,248 on the 4-hours chart.
The price is showing a few positive signs, but there is a major resistance on the upside near $1,260. It coincides with the 61.8% Fib retracement level of the last decline from the $1,372.57 high to $1,237.94 low.
A break above $1,260 may perhaps open the doors for a push towards $1,270. On the flip side, a failure to gain momentum could result in a downside reaction back towards the $1,250 support area.
Recently in the US, the Factory orders report for May 2018 was released by the US Census Bureau. The market was looking for no change in orders in May 2018, compared with the previous month.
However, the result was positive as there was a rise of 0.4% in orders. Moreover, the last reading was revised from -0.8% to -0.4%. The outcome was positive, but it did not help the US Dollar. Major pairs such as EUR/USD and GBP/USD were seen recovering, and gold price traded higher.
Economic Releases to Watch Today
- Germany’s Services PMI for June 2018 – Forecast 53.9, versus 53.9 previous.
- France Services PMI June 2018 – Forecast 56.4, versus 56.4 previous.
- Spanish Services PMI for June 2018 – Forecast 53.3, versus 53.1 previous.
- Euro Zone Services PMI for June 2018 – Forecast 55.0, versus 55.0 previous.
- UK Services PMI for June 2018 – Forecast 54.0, versus 54.0 previous.