Gold Price Seems To Be In Strong Uptrend Above $1,725

Key Highlights

  • Gold price started a fresh rally and traded to a new multi-year high at $1,765.
  • A key bullish trend line is forming with support at $1,725 on the 4-hours chart of XAU/USD.
  • The US Manufacturing PMI is likely to stay well below 50.00 at 38.00 in May 2020 (Preliminary).
  • The US Initial Jobless Claims in the week ending May 16, 2020 could decline from 2981K to 2400K.

 

Gold Price Technical Analysis

In the past few days, gold price gained bullish momentum above the $1,725 and $1,740 levels against the US Dollar. The price traded to a new multi-year high at $1,765 before starting a downside correction.

The 4-hours chart of XAU/USD indicates that the price corrected below the $1,760 and $1,750 levels. The decline was such that the price even broke $1,740 and tested the $1,725 support. However, the price remained well above the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).

A low is formed near $1,725 and the price is currently rising. It broke the 50% Fib retracement level of the recent decline from the $1,765 high to $1,725 low.

On the upside, the first major resistance is near the $1,755 level since it is close to the 76.4% Fib retracement level of the recent decline from the $1,765 high to $1,725 low. If the price gains pace above $1,755, it is likely to surpass the $1,765 high.

The next key resistance is seen near the $1,780 level. Conversely, the price might correct gain towards the $1,725 support. There is also a key bullish trend line forming with support at $1,725 on the same chart.

Overall, gold price is likely to continue higher unless it breaks the $1,725 trend line support. Looking at major pairs, both EUR/USD and GBP/USD are showing positive signs above 1.0920 and 1.2200 respectively.

Economic Releases to Watch Today

  • Germany’s Manufacturing PMI for May 2020 (Preliminary) - Forecast 39.2, versus 34.5 previous.
  • Germany’s Services PMI for May 2020 (Preliminary) - Forecast 26.6, versus 16.2 previous.
  • Euro Zone Manufacturing PMI May 2020 (Preliminary) – Forecast 38.0, versus 33.4 previous.
  • Euro Zone Services PMI for May 2020 (Preliminary) – Forecast 25.0, versus 12.0 previous.
  • UK Manufacturing PMI for May 2020 (Preliminary) – Forecast 36.0, versus 32.6 previous.
  • UK Services PMI for May 2020 (Preliminary) – Forecast 25.0, versus 13.4 previous.
  • US Manufacturing PMI for May 2020 (Preliminary) – Forecast 38.0, versus 36.1 previous.
  • US Services PMI for May 2020 (Preliminary) – Forecast 30.0, versus 26.7 previous.
  • US Initial Jobless Claims - Forecast 2400K, versus 2981K previous.