Gold Price Breaks Key Resistance, Dips Remain Supported

Key Highlights

  • Gold price started a fresh increase above $1,288 and $1,300 resistances against the US Dollar.
  • There was a break above a key bearish trend line at $1,281 on the 4-hours chart of XAU/USD.
  • The US Factory Orders in April 2019 declined 0.8%, less than the -0.9% forecast.
  • The US ISM Non-Manufacturing Index in May 2019 is likely to remain stable at 55.5.

Gold Price Technical Analysis

The $1,275 level acted as a strong support and gold price bounced back against the US Dollar. The price broke the key $1,288 and $1,295 resistance levels to move into a positive zone.

Gold Price Technical Analysis

The 4-hours chart of XAU/USD indicates that the price surpassed the $1,300 resistance area and the 100 simple moving average (4-hours, red). There was a close above the $1,310 level and the 200 simple moving average (4-hours, green).

The bulls gained traction, resulting in a solid upward move above the $1,320 level. The price traded close to the $1,300 level and it is currently consolidating gains.

On the upside, an immediate resistance is near the $1,330 and $1,335 levels. If there is an upside break above $1,335, the price could accelerate above the $1,340 level.

On the downside, an initial support is near the $1,316 level or the 23.6% Fib retracement level of the last wave from the $1,275 swing low to $1,329 swing high. If there is an extended downside correction, the price might find bids near the $1,300 support area.

Looking at the major pairs, EUR/USD gained momentum above the 1.1225 resistance level and GBP/USD is slowly recovering above the 1.2650 level.

Economic Releases to Watch Today

  • Germany’s Services PMI for May 2019 – Forecast 55.0, versus 55.0 previous.
  • Euro Zone Services PMI for May 2019 – Forecast 52.5, versus 52.5 previous.
  • UK Services PMI for May 2019 – Forecast 50.6, versus 50.4 previous.
  • US Services PMI for May 2019 – Forecast 50.9, versus 50.9 previous.
  • US ISM Non-Manufacturing Index for May 2019 – Forecast 55.5, versus 55.5 previous.

Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

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