Gold Takes Advantage Of A Weaker Greenback - The Technical Outlook - Forex News by FX Leaders

Gold Takes Advantage Of A Weaker Greenback – The Technical Outlook

Posted Monday, January 15, 2018 by
Arslan Butt • 1 min read

Gold began trading bullish once the dollar had reached its high against a basket of currencies. As we can recall, the price action was majorly impacted by the news that the Bank of Japan would cut the Japanese government bonds buying program, as well as the US corporate debt. Investors, therefore,are now selling the dollar and moving to JPY due to speculation that country’s central bank may wind down its monetary stimulus this year.

XAUUSD – Technical View

On the 4- hour chart, we can see that Gold broke out of the ascending triangle pattern at $1,326, and lead the metal to a multi-month high of $1,344. The Gold, technically speaking, would need to plunge to $1,332 in order to continue its bullish trend.

Gold - 4- Hour Chart

Gold – 4- Hour Chart

The leading indicators, both the RSI and Stochastics are holding at the top overbought zone.

Gold is likely to face a resistance of $1,349 on the horizontal trendline.

There is currently a huge divergence between the 50 – periods EMA, and the CMP. This means that technically, the price of gold should be at $1,320.

Gold // XAUUSD – Trading Plan

It’s quite difficult to predict the investor’s sentiment currently, as the US banks are closed, and the only activity we see in the market is due to noise traders. The $1,347 should be monitored, as Gold may drop below this with a stop above $1,351, and take profit at $1,339, $1,332. Good luck.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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