Gold Breaks Out of Upward Channel – What to Expect Next?
The precious metal GOLD edged higher from a more than one-week low hit earlier, helped by dwindling share markets as US crude prices plunged and concerns about coronavirus-linked economic damage persisted. The reason behind the fresh risk-off market sentiment is the rise in the coronavirus (COVID-19) driven death toll from the US and the UK. US President Donald Trump’s indirect attack on China’s struggles to stop the coronavirus outbreak also pushes the risk-off sentiment.
On the flip side, US President Donald Trump showed some willingness to deliver another relief plan while also pushing for an economic re-open program but failed to extend the Friday’s risk-on market sentiment. The yellow-metal got mild support earlier by the People’s Bank of China’s (PBOC) rate cut.
The 10-year US Treasury yields dropped more than 2-basis points (bps) to 0.634%, whereas Asian stocks also struggle. Looking forward, traders will keep their eyes on the virus-related headlines for taking fresh directions.
Daily Support and Resistance
S1 1629.37
S2 1660.04
S3 1672.4
Pivot Point 1690.72
R1 1703.07
R2 1721.39
R3 1752.07
Technically, gold is bouncing off above a strong support area of 1,672 to trade around 1,695 level. Closing of candles below 1,701 levels may drive some bearish correction in the market while the major resistance stays around 1,712. Below this, we may see some selling bias in gold today.
The 50 EMA is suggesting buying while the MACD is suggesting selling trend, but histograms are becoming smaller suggestings chances of bullish reversal. Let’s look for buying trades over 1,686 and selling trades below 1,712 today. Good luck!
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