Short

GOLD - Formation of a bearish channel. Bounce before the fall

Updated

is moving into a consolidation phase after a phase of strong sell-offs. The probable reason could be the news that the market is waiting for. What can happen in the market?

The general fundamental background for gold is negative, therefore, it is worth considering further prospects downward. Technically, a descending channel is beginning to form on the chart, but the price is already forming a rebound from the trend support, confirming the presence of the channel boundary. As the news is ahead, before the fundamental data update, the gold market may test one of the key resistances to capture liquidity. Such target may be MA-50, 1998, or the boundary of the range 2000-2004. And the target on the background of the bearish trend may be the area of 1980 - 1976.

Support levels: 1990
Resistance levels: MA-50, 1998, 2000, 2004

Traders are waiting for the news, analysts are generally expecting bearish numbers, but something tells us that the current US policy will not allow strong bearish data. Technically the trend is bearish and after the rally, the price may test the sellers' liquidity zones before falling further

Regards R. Linda!

Note

Core Retail Sales - expected 0.2% instead of 0.4% - negative data
Initial Jobless Claims - expected 219K instead of 218K - negative data
Philadelphia Fed Manufacturing Index - Expected -8.0 instead of -10.6 - positive data
Retail Sales - Expected -0.2% instead of 0.6% - non-aggressive data.

Overall - analysts are expecting bad data for the usa index, which could technically bring the index down, gold could then buy back the decline and strengthen to 2000-2010.

But, the market is paying attention to the actual data relative to the expected data.
If the data will be better than expected - positive, the dollar will continue its growth on a mostly bullish fundamental background.
But, if the data is worse than expected, the dollar index may catch a wave of strong sell-offs, which will have a positive and strong effect on gold.

The U.S. policy may not allow strong negative indicators based on the inflation situation, as well as the presidential election race. There is a high probability that the data may be neutral-bullish for the $

Note

False breakdown of resistance.
On the background of news, the price is strengthening. The first phase in action.

Negative background for gold continues

RLinda

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