- The bias remains bullish as long as it stays above the median line (ml).
- A new higher high activates further growth.
- Powell’s testimony may leave a significant impact on the gold
The gold price is trading in the red at $1,851 at the time of writing. Today, it has climbed as high as $1,858, registering a fresh high.
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After its strong rise, a retreat is natural. The price could retreat a little before extending its growth. The bias is bullish in the short term, so further growth could be expected.
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Surprisingly or not, the yellow metal rallied even though the US ISM Services PMI came in at 55.1 points above the 54.5 points expected on Friday.
In addition, Final Services PMI came in at 50.6 points above the 50.5 expected. Today, the XAU/USD took a hit from the Switzerland Consumer Price Index.
The economic indicator reported a 0.7% growth exceeding the 0.5% growth expected and the 0.6% in the previous reporting period. Later, the US Factory Order is expected to report a 1.8% growth, while the Canadian Ivey PMI may drop from 60. 1 to 55.9 points.
Tomorrow, the RBA, RBA Gov Lowe Speaks, and Fed Chair Powell’s testimony represent high-impact events. The Cash Rate may increase from 3.35% to 3.60%.
Gold price technical analysis: Retracing to the median line
Technically, XAU/USD resumed its leg higher after registering through a 23.6% retracement level and below the median line (ML).
It has failed to stay above $1,856, signaling exhausted buyers. The price may test the median line (ML) before resuming its uptrend. The 23.6% ($1,841) represents a downside target and obstacle.
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As long as it stays above the median line (ML), the bias remains bullish in the short term. Dropping and stabilizing below it may indicate that the leg higher could be over. Staying above the median line (ML) and making a new higher high activates further growth. The upper median line (UML) represents a potential upside target.
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