Gold Price Starts Fresh Increase, Dollar Weakens

Key Highlights

  • Gold price started a fresh increase and cleared the key $1,850 resistance.
  • There was a break above a key bearish trend line near $1,842 on the 4-hours chart of XAU/USD.
  • EUR/USD is showing positive signs above 1.2080, GBP/USD is consolidating below 1.3400.
  • The BoC Interest Rate Decision is scheduled for today (Forecast - no change from 0.25%).

 

Gold Price Technical Analysis

This past month, gold price tested the $1,765 support level against the US Dollar before staring a decent recovery. The price gained bullish momentum above the $1,800 resistance to move into a positive zone.

The 4-hours chart of XAU/USD indicates that the price broke many key hurdles near the $1,840 and $1,850 levels to start the current increase. There was also a break above a key bearish trend line near $1,842.

The price moved steadily and climbed above the 50% Fib retracement level of the last major decline from the $1,965 high to $1,764 swing low. There was a close above the $1,850 level and the 100 simple moving average (red, 4-hours).

If there are more upsides above $1,875 level and the 200 simple moving average (green, 4-hours), the price could accelerate higher towards $1,888 and $1,895.

Conversely, there could be a short-term downside correction below $1,860. However, the recent breakout zone at $1,850 and $1,840 could provide support.

Looking at EUR/USD, the pair remained stable above 1.2080 and it could start another increase. Besides, GBP/USD is holding the 1.3250 support, but it must settle above 1.3400 to continue higher.

Economic Releases to Watch Today

  • Germany’s Trade Balance for Oct 2020 - Forecast €18B, versus €17.8B previous.
  • BoC Interest Rate Decision – Forecast 0.25%, versus 0.25% previous.