(function() { var didInit = false; function initMunchkin() { if(didInit === false) { didInit = true; Munchkin.init('105-GAR-921'); } } var s = document.createElement('script'); s.type = 'text/javascript'; s.defer = true; s.src = '//munchkin.marketo.net/munchkin.js'; s.onreadystatechange = function() { if (this.readyState == 'complete' || this.readyState == 'loaded') { initMunchkin(); } }; s.onload = initMunchkin; document.getElementsByTagName('head')[0].appendChild(s); })();

Gold Price Approaching Next Key Break, Dollar Weakens

Article background

Aayush Jindal

Key Highlights

  • Gold price is trading above the $1,850 and $1,860 support levels.
  • A major bullish trend line is forming with support near $1,870 on the 4-hours chart of XAU/USD.
  • EUR/USD climbed above 1.1850, and GBP/USD surpassed the 1.3200 resistance.
  • The US Retail Sales increased 0.3% in Oct 2020 (MoM), down from +1.6%.

Gold Price Technical Analysis

After a sharp decline, gold price found support near $1,850 against the US Dollar. The price traded as low as $1,950.50 on TitanFX before it started a short-term upside correction.

The 4-hours chart of XAU/USD indicates that the price recovered from the $1,850 support, but it struggled below the 200 simple moving average (green, 4-hours), and the 100 simple moving average (red, 4-hours).

The price also faced a strong resistance near the 38.2% Fib retracement level of the downward move from the $1,965 swing high to $1,850 low. It seems like the bulls are struggling to gain strength above the $1,900 resistance level.

The next major resistance is near the $1,910 level or the 50% Fib retracement level of the downward move from the $1,965 swing high to $1,850 low. A close above $1,910 could open the doors for a sharp increase towards the $1,925 and $1,930 resistance levels.

On the downside, there is a major bullish trend line forming with support near $1,870 on the same chart. A clear break below the trend line could push the price towards the main $1,850 support. Any further losses might lead the price to $1,820.

Overall, gold price is reaching a major breakout and it seems like it could either rally above $1,910 or dive towards the $1,850 support. Looking at EUR/USD, the pair started a fresh increase above the 1.1850 resistance. Similarly, GBP/USD gained bullish momentum above the 1.3200 and 1.3250 levels.

Economic Releases to Watch Today

  • UK Consumer Price Index Oct 2020 (YoY) – Forecast +0.6%, versus +0.5% previous.
  • UK Core Consumer Price Index Oct 2020 (YoY) – Forecast +1.3%, versus +1.3% previous.
  • Euro Zone CPI Oct 2020 (YoY) - Forecast +0.2%, versus +0.2% previous.
  • Euro Zone CPI Oct 2020 (MoM) - Forecast +0.1%, versus +0.1% previous.
  • Canadian Consumer Price Index Oct 2020 (MoM) – Forecast +0.2%, versus -0.1% previous.
  • Canadian Consumer Price Index Oct 2020 (YoY) – Forecast +0.4%, versus +0.5% previous.
Great
Trustpilot
Open an AccountOpen Share Account24/7 Support