Gold Prices Reverse Ahead Of 2019-Low Following Dovish ECB, Weak NFP

In turn, the FOMC may continue to drop the hawkish forward-guidance for monetary policy at its next interest rate decision on March 20, and the current environment may continue to heighten the appeal of gold as macro-techs, with all the wild swings of the past 15 months, suggest the market could be undergoing a major long-term topping process. Moreover, recent price action instills a constructive outlook for gold as the decline from the yearly-high ($1347) appears to have stalled ahead of the January-low ($1277), with the Relative Strength Index (RSI) also highlighting a similar dynamic as it comes up against trendline resistance and threatens the bearish formation carried over from the previous month.

GOLD DAILY CHART

(Click on image to enlarge)

Image of gold daily chart

  • Failure to snap the yearly opening range instills a constructive outlook for gold, with the price for bullion at risk for a larger advance as it attempts to break out of a narrow range, with the RSI at risk of flashing a bullish trigger.
  • In turn, the lack of momentum to test the 2019-low ($1277) may bring the topside targets back on the radar, but need a break/close above the $1298 (23.6% retracement) to $1302 (50% retracement) to open up the Fibonacci overlap around $1315 (23.6% retracement) to $1316 (38.2% expansion).
  • Next region on interest comes in around $1328 (50% expansion) to $1329 (50% expansion) followed by the $1340 (61.8% expansion) region.
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