Gold Violates Psychological Level of $1300 - US Government Reopens - Forex News by FX Leaders

Gold Violates Psychological Level of $1300 – US Government Reopens

Posted Monday, January 28, 2019 by
Arslan Butt • 1 min read

On Friday, the precious metal gold soared over 1% to cross above the psychological trading level of $1,300. The bullish trend in gold was triggered after a sell-off in the Greenback for two major reasons:

  • The dollar slipped ahead of a US Federal Reserve meeting next week where the central bank is widely expected to leave interest rates unchanged
  • Investors boosted safe-haven appeal over the continued partial shutdown of the US Government.

US Government Reopens

The US government has re-opened momentarily after the most prolonged shutdown in American history. It’s been closed for more than 35 days and has finally opened, but temporarily. Which is why we have a slightly bearish impact on gold today. We will explain the impact of US Government reopen in more detail in our next update.

GOLD – XAU/USD – Technical Outlook

  • Taking a look at the 4-hour timeframe, the yellow metal gold is trading in an overbought zone.
  • The RSI and Stochastics are steady above 90 which is good enough to trigger a correction.
  • Gold has formed a bearish candlestick pattern called a shooting star. Shooting star is followed by a sharp bullish trend and it typically triggers a sell-off in the market.
  • Gold has an immediate resistance near $1,303 along with support near $1,297.

Gold – XAU/USD – Trade Plan

Consider selling below $1,303 with a stop loss above $1,306 and take profit near $1,297 and $1,293.

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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