Gold Price Breaks Key Support, US GDP Next

Key Highlights

  • Gold price failed to clear the $1,920 resistance and declined below $1,900.
  • There was a break below a crucial bullish trend line at $1,900 on the 4-hours chart of XAU/USD.
  • EUR/USD and GBP/USD declined below 1.1780 and 1.3000 respectively.
  • The US Gross Domestic Product is likely to grow 31% in Q3 2020 (Preliminary).

 

Gold Price Technical Analysis

In the past few days, gold price struggled to gain momentum above the $1,920 resistance against the US Dollar. As a result, there was a bearish reaction below the key $1,900 support.

The 4-hours chart of XAU/USD indicates that the price started a fresh decline from the $1,910 swing high and the 200 simple moving average (green, 4-hours).

It broke the $1,900 support and settled well below the 100 simple moving average (red, 4-hours). Moreover, there was a break below a crucial bullish trend line at $1,900. It opened the doors for a sharp decline below the $1,885 support.

The price seems to be facing an increase in selling pressure below $1,885. If it breaks the $1,875 support, there is a risk of more losses. The next major support is near the $1,850 level (a multi-touch zone).

If there is a fresh increase, the price is likely to face sellers near the $1,885 and $1,888 levels. The main resistance is now forming near $1,900 and the 100 simple moving average (red, 4-hours).

Looking at EUR/USD, the pair failed to extend gains and it declined below the 1.1780 and 1.1750 support levels. Similarly, GBP/USD declined below the 1.3000 support level.

Economic Releases to Watch Today

  • US Gross Domestic Product Q3 2020 (Preliminary) – Forecast 31% versus previous -31.4%.
  • German Consumer Price Index for Sep 2020 (YoY) (Preliminary) – Forecast -0.3%, versus -0.2% previous.
  • German Consumer Price Index for Sep 2020 (MoM) (Preliminary) – Forecast 0%, versus -0.2% previous.
  • ECB Interest Rate Decision – Forecast 0%, versus 0% previous.