The perceived safe haven precious metal broke
the critical $1300 barrier today and marked a fresh 4-month low at $1288. US
bulls and some technical factors pushed the price to the downside. DXY jumped
to 93.28 after the release of US retail sales data, but the main driver of grenback’s
strength are the rising US yields, which pinned today the highest level since
2011.
Technically speaking the bias is clearly bearish. XAU/USD broke the key support
provided by 50% Fibonacci retracement of latest December to January bullish run
at $1300. The slide continued and tested the 61.8% of same Fibo and finally the
price bounced slightly to currently trade at $1292.
Ont he daily chart stochastic and RSI are showing strong bearish momentum and
both are located below their mid-lines.
If the current breakdown is sustained, gold might meet again the 61.8% Fibo at $1286
before it has any chance to rebuild. However, the $1300 level remains reclaimed
decisively so the bullish stance is rejected. Furthermore if the price goes
back above the resistance provided by 50% FIbo at $1302 then we might conclude
that today’s sell-off could be a false breaks. Golden bulls could return only
if breaking the recent swing high at
$1325. But for now the path is paved towards the downside.
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