Breakout Turns to Fakeout – Trading Gold on Friday
Arslan Butt • 1 min read
Gold prices hit one month high during the New York session, supported by trade worries between U.S. and China, even as the U.S. Federal Reserve forecast a slightly faster pace of interest rate hikes this year. The U.S-Chinese trade war sentiment is under the spotlight for the dollar-denominated instruments as it’s extending all safe-haven instruments a boost in value. Gold is on top of the list. Take a look at the technical setup…
Gold – XAU/USD – Highlighting Key Technical Points
1) On Thursday, gold violated $1,306 to test $1,309 but the breakout later converted into fakeout. Taking a look at the 4- hour chart, the bullish breakout candle peaked to $1,309 but fell back to close below $1,306. This signifies that the investors are still respecting $1,306 as a resistance.
2) The upward trendline is now extending a strong support to gold near $1,296/94 and bearish breakout can lead gold prices towards $1,289.
3) The leading indicators RSI and Stochastics have come out of the overbought. Which means, sooner or later we can have another opportunity to secure buying position in gold.
4) Lastly, the fundamentals coming out from the U.S. such as capacity utilization rate and UOM consumer sentiment can shake gold prices today. Check out FX Leaders June 15 – Economic Event’s Brief to read more about these fundamentals.