FUNDAMENTAL
OVERVIEW
Gold staged a rebound yesterday without any fundamental reason. The catalyst might have been a squeeze
triggered by the breakout of a key trendline that’s been capping the upside for
several weeks.
As I mentioned previously,
the risk/reward did flip to the upside after the soft US inflation data and the
dovish repricing, but traders will likely need a de-escalation on the US-Iran
front for a more sustained trend.
The US-Iran headlines continue
to drive the price action, especially this week with pretty much nothing on the
agenda. De-escalatory news should support gold and trigger rallies, while
further escalations will continue to weigh on the market and drag prices lower.
GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that gold pulled back into the major downward trendline. This is where we
can expect the sellers to step in with a defined risk above the trendline to
position for a drop into the 3,885 level. The buyers, on the other hand, will
look for a break to open the door for a move into the next trendline around the
4,500 level.
GOLD TECHNICAL ANALYSIS – 4
HOUR TIMEFRAME
On the 4 hour chart, we can
see more clearly that the break above the minor downward trendline triggered a
squeeze into the major trendline. There’s not much we can add here as the
sellers will likely start piling in around these levels with a defined risk
above the trendline to position for a drop into the 3,885 level.
GOLD TECHNICAL ANALYSIS – 1
HOUR TIMEFRAME
On the 1 hour chart, we have
a minor upward trendline defining the recent pullback. The buyers will likely continue
to lean on the trendline with a defined risk below it to keep pushing into new
highs, while the sellers will look for a break to increase the bearish bets
into the 3,885 level next. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow, we get the latest
US Jobless Claims figures, while on Friday we conclude the week with the Flash
US PMIs. The focus remains on US-Iran headlines.
This article was written by Giuseppe Dellamotta at investinglive.com.