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Gold Price Corrects Lower, Key Support Nearby

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Aayush Jindal

Key Highlights

  • Gold price started a downside correction from the $1,834 region.
  • It broke a major bullish trend line with support near $1,822 on the 4-hours chart.
  • EUR/USD is facing resistance near 1.1850 and 1.1865.
  • GBP/USD extended its decline below 1.3800, but it stayed above 1.3700.

Gold Price Technical Analysis

Earlier this month, gold extended its increase above $1,820 against the US Dollar. The price even cleared $1,825, but it failed to gain momentum above $1,832.

The 4-hours chart of XAU/USD indicates that the price traded as high as $1,833 before there was a downside correction. The price traded below the $1,820 support zone.

There was also a break below a major bullish trend line with support near $1,822 on the same chart. The pair extended its decline below $1,800, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

There was also a break below the 23.6% Fib retracement level of the upward move from the $1,678 swing low to $1,833 high. An immediate support is near the $1,775 level.

The 38.2% Fib retracement level of the upward move from the $1,678 swing low to $1,833 high is also near the $1,775 zone. Any more downsides may possibly lead the price towards the $1,756 level.

On the upside, the price is facing resistance near $1,798 and $1,800. The next major resistance sits near $1,810, above which the price could rise towards $1,830. Any more gains could lead the price towards the $1,850 level.

Looking at EUR/USD, the pair extended its decline below 1.1850, which is now acting as a resistance. Besides, GBP/USD traded below the 1.3800 support zone.

Economic Releases to Watch Today

  • US Initial Jobless Claims - Forecast 335K, versus 340K previous.
  • ECB Interest Rate Decision – Forecast 0%, versus 0% previous.
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